Bitcoin Plunges $20,000 as the Cryptocurrency Market Turns Flat

The vast majority of the cryptocurrency market is flat on its face, and Bitcoin, the industry's leader that has overcome years of skepticism and proven its recovery abilities time and again, has lost $20,000 in its price in the last month.

The vast majority of the cryptocurrency market is flat on its face, and Bitcoin (BTC), the industry’s leader that has overcome years of skepticism and proven its recovery abilities time and again, has lost $20,000 in its price in the last month.

BTC prices have been struggling since earlier this month, but dramatic plunges were more prominent recent days as various factors—from geopolitical woes to trade wars—beat down financial markets and in turn, affected crypto.

Bitcoin's Dramatic Plunge from ATH

It was during the inauguration of U.S. President Donald Trump on Jan. 20 when Bitcoin hit its all-time high above $108,700 amid high hopes that the new administration will be much kinder to the crypto industry than its predecessor.

Ahead of inauguration, BTC already logged successive new all-time highs (ATH) until it settled for the Inauguration Day ATH.

As things started to unravel with the new government and Trump reawakened his trade wars with several countries, Bitcoin’s price started to slow down, as per data from CoinGecko.

By Feb. 20, exactly a month after hitting its ATH, Bitcoin was down to $95,000 and by Monday, the world’s largest cryptocurrency by market cap made it clear it was on a path further down.

As of early Wednesday, BTC is trading at around $88,000, some $20,000 down from its all-time high over a month ago.

Why is Crypto Down?

Some analysts have said the reactions of the broader financial market to Trump’s tariffs, geopolitical tensions over Ukraine, and other political unrest in the U.S., could be to blame for the market downturn.

However, crypto derivatives exchange FTX's head of institutional products, Canium D'Angelo, told Block in a recent interview that it’s "too early to tell" what factor is most influential in the market movements.

D'Angelo isn't completely right or wrong. Crypto has suffered similar massive red days over the past decade, including the “crypto winter” after the collapse of crypto exchange FTX late in 2022. On the other hand, it could be safe to say the current market conditions may be prolonged or cut short depending on incoming huge, positive developments on crypto policy and big projects.

It remains to be seen whether crypto will repeat history—plunging hard only to skyrocket to unprecedented highs—and if Bitcoin will see major shifts amid the U.S. Securities and Exchange Commission's (SEC) recent pivot toward a better crypto regulatory approach.