Continue the vertical collapse of the queen of cryptocurrencies, which has now officially entered a correction. This morning the bitcoin It stands at just over $77. Last Thursday it was over $88, and in mid-January it was over $96. Compared to the all-time high of $126 billion reached in October, the drop is almost 40%.
“Bitcoin is going through a corrective phase due to multiple pressure factors, he explains. The uncertainties related to the Greenland and the return of the threats (later withdrawn) on tariffs – with an attitude similar to that seen with China last October – have weighed on market sentiment. Furthermore, selling activity by so-called whales continues to exert downward pressure on prices,” explained James Butterfill, head of Research at coinshares, the leading European investment firm specializing in digital assets, according to which other factors could also contribute to weighing down the cryptocurrency created by Satoshi Nakamoto.
Bitcoin and the New Fed Chairman
One of the main ones is the decision by US President Donald Trump to nominate Kevin Warsh to chair the Federal ReserveThe banker, although close to the tycoon, according to the markets should ensure independence of the central institute and therefore should resume strength to the dollar too. This latter eventuality contributes to bitcoin's diminished appeal as a currency alternative and fuels a "risk-off" phase.
Warsh, however, has a relatively positive view of cryptocurrency, which he describes as a “sustainable store of value, like gold”, but not like a currency, given the high volatility. "It doesn't worry me; it's not a substitute for the US dollar," seeing it rather as a 'policeman' that incentivizes better decisions by the Fed, not as a threat to the dollar's primacy.
Delays on stablecoins also weigh heavily
Meanwhile, months have passed since Genius Act, the law strongly supported by Trump that clears the stablecoin, on the regulatory front all is silent. And the delays have not escaped the market, which is wondering what will be the fate of the Clarity Act, The measure, originally intended to establish clear rules for stablecoins, is currently blocked in the U.S. Senate Banking Committee.
The four-year cycle
“Although I do not completely agree with the theory of 'four-year cycle', the expert emphasizes, "it must be recognized that, in part, it has self-fulfilled, contributing to the current contraction phase", explains James Butterfill of CoinShares. Often and willingly, in the recent past, the second year of the mandate The presidency, which began last month for Trump, has often marked a period of decline. This happened in 2014, 2018, and 2022.
Historically, in the presence of geopolitical shocks Whether it's the collapse of the yen carry trade or other types of trade tensions, bitcoin tends to initially react negatively, only to then find a level of stability based on the specific circumstances. "We therefore expect a similar dynamic this time too: short-term pressure followed by a subsequent recovery phase," the expert concludes.
