Major crypto companies are being dragged down with it. Coinbase, the largest cryptocurrency exchange in the U.S., has seen its stock decline by 50% in the last three months and is currently trading around $151. The stock price of Strategy, a company whose raison d’être is to buy and hold Bitcoin, is also down 54% during that time. Meanwhile, the shares of stablecoin giant Circle, which traded as high as $263 following its IPO last June, are now trading at $52.
The plummeting of Bitcoin and these major stocks is the latest sign that cryptocurrencies are not living up to what was supposed to be a golden age under Trump’s second administration. The president adopted a much more crypto-friendly stance than his predecessor. Following his election, the digital asset industry experienced a surge, which now feels more like a sugar rush. The recent decline began on a fateful day in October when traders lost $19 billion in their crypto positions, and Bitcoin has only kept tumbling from there.
Crypto was supposed to be a safe haven asset during tough economic times. The tough times have come, but traders have invested elsewhere. Gold, for example, is up 43% in the past six months, as faith in the U.S. dollar weakens—though it too has incurred major setbacks in the last two weeks. Macroeconomic worries stem from stubborn inflation and a weakening job market, among other factors.
“Poltical uncertainty, including a high probability of a government shutdown in February and the nomination of a more tightening-oriented Fed Chair, encourages investors to delay returning to risk-on assets,” said Beto Aparicio, senior manager of strategic finance at Offchain Labs.
Bitcoin isn’t the only cryptocurrency to suffer losses. Ethereum is down roughly 42% in the last three months to its current price of about $1,970, and Solana has declined 49% during that time to its current price of about $83.
Things will only get worse from here, according to traders on prediction markets. On Kalshi, 58% of traders say that Bitcoin will dip below $60,000 at some point in February.
