Bitcoin drops below US$61,000, wiping out gains since Trump’s win

SYDNEY – Bitcoin tumbled below US$61,000 as the unwinding of leveraged bets and broader market turbulence deepened a sell-off that has wiped out all the gains since US President Donald Trump’s election

set off a speculative rush into cryptocurrencies.

The token sank as much as 4.8 per cent to US$60,033 in early Asia trade on Feb 6, extending a sharp sell-off that plunged it to its lowest since October 2024.

The rout has erased half of Bitcoin’s value since it reached a record high four months ago and has spread to other tokens, related exchange-traded funds (ETFs) and companies – such as Strategy – which hold vast sums of the coins.

The downturn marks an abrupt retreat from Bitcoin’s meteoric rise through much of 2025, when the return of the crypto-friendly Republican to the White House sent investors piling into such tokens and the Wall Street vehicles that have sprouted up around them.

The market started cracking in February as rising geopolitical tensions sent tremors across global financial markets and curbed risk-taking. That sparked Bitcoin’s precipitous decline from mid-January and set off a self-reinforcing cycle of selling as funds liquidated assets to meet redemptions and unwind leveraged bets.

“The fear and uncertainty across the market are evident,” said Mr Chris Newhouse, head of business development at Ergonia. “Without conviction-based buyers willing to lean into the selling, each wave of ETF redemptions and liquidation cascades.”

He said that was “amplifying the magnitude of each leg lower and reinforcing the defensive positioning that’s keeping organic demand on the sidelines”.

The slide has echoes of the one in 2022, when prices retreated sharply from the surge seen during the easy-money era of the Covid-19 pandemic as the Federal Reserve tightened monetary policy. It has already taken a toll on intermediaries such as the exchanges, including Coinbase Global, whose shares have fallen over 30 per cent in 2026, and Gemini Space Station, which said it plans to cut up to 25 per cent of its workforce and wind down operations in Britain, the European Union and Australia.

This time, Bitcoin and other cryptocurrencies are also seeing competition from other forms of speculation, such as legalised sports gambling and prediction-market wagering on everything from politics to entertainment. At the same time, retail flow continues to chase zero-day options in equities and higher-yield crypto plays across decentralised exchanges.

The latest drop comes as digital assets face continued doubts about their real-world use as well. Once touted as an inflation hedge or a rival to gold or the US dollar as a stable store of value, Bitcoin has continued to trade more like a high-risk asset and has failed to serve as a haven during times of financial market stress.

In fact, its growing presence in institutional portfolios has at times made it more vulnerable to broad de-risking, particularly during bouts of volatility in tech equities and precious metals, such as those seen in recent weeks.

“Momentum has taken over right now, and crypto bear markets tend to end more in apathy than despair,” said Mr Ryan Rasmussen, director and head of research at Bitwise Asset Management.

“We are currently in the despair phase of the drawdown,” he added. “That momentum has taken over.”

Inflows into US spot-Bitcoin ETFs had acted as a leg of support for much of 2025 as tens of billions of dollars flowed into the products and helped buoy the token’s price. But those flows have reversed as prices have plunged, with about US$2 billion (S$2.55 billion) coming out of Bitcoin ETFs over the past month alone, data compiled by Bloomberg shows.

The figure is even starker when looked at over the past three months, with more than US$5 billion yanked out.

The meltdown of the largest cryptocurrency has rippled through the digital-asset world, with smaller, less liquid speculative tokens down even more. The MarketVector Digital Assets 100 Small-Cap Index, which tracks the 50 smallest digital assets in a basket of 100, has plummeted around 70 per cent over the past year.

Traders have become increasingly defensive in the options market. Medium-term contracts, such as those expiring in late June, are pointing to an even more bearish outlook on token prices, with the most open interest clustered around US$60,000 and US$20,000, according to the Deribit exchange.

Mr Ilan Solot, senior global markets strategist at Marex, said the recent sell-off has been fuelled by several factors, such as the downturn in some tech stocks, the outperformance of gold, the broader risk-off sentiment and general questions about the framework for evaluating the value of cryptocurrencies.

“The outlook is probably still bearish for now, but the worst might be behind us,” he said. “Still, these types of moves have historically always been buying opportunities for multi-year investors, and many will see it that way.” BLOOMBERG