Bitcoin, the world’s largest cryptocurrency, is set to plunge nearly 5% this month as the digital asset has struggled in recent weeks amid broader market jitters and subdued investor risk appetite.
Cryptocurrencies “came in October, followed gold, followed stocks near record highs, and when uncertainty hit people for the first time perhaps this year, they didn’t switch back to bitcoin en masse,” said Adam McCarthy, a senior research analyst at digital market data provider Kaiko. In October, the largest crypto liquidation in history occurred after US President Donald Trump announced a 100% tariff on Chinese imports and threatened export controls on critical software. Bitcoin fell to a low of $104,782.88 during the period from October 10 to 11, after setting a new all-time high above $126,000 a few days earlier.
“That breakout on the 10th really reminded people that this asset class is very narrow,” McCarthy said. “It’s bitcoin and (ether), and even those can still have a 10% loss in 15, 20 minutes.” A whirlwind October will end with spooked investors unsure about near-term global monetary policy as the US Federal Reserve bucks market expectations that it would continue cutting rates this year as the government shutdown blocks crucial economic data. Meanwhile, several influential figures have expressed concerns about high valuations in the stock markets. Jamie Dimon, CEO of JPMorgan Chase, warned earlier this month of an increased risk of a significant correction in the US stock market within the next six months to two years.
Despite the drop in October, bitcoin is still up more than 16% so far this year.
Cryptocurrencies have generally seen a boost this year as Trump has embraced digital assets, leading to the dismissal of a series of lawsuits against prominent crypto platforms and a shift by Trump’s financial regulators to create specialized rules to enable digital assets.
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