(Yahoo! Finance) - Bitcoin (BTC-USD) crashed over 13% on Thursday, sinking below $64,000 to touch its lowest levels since October 2024 as a steep sell-off accelerated.
The token is down nearly 50% from last year's all-time high, erasing all of the gains made during President Trump's second term. Investors had been optimistic that the administration's crypto-friendly policies would lift digital asset prices.
Despite the intense selling, some bitcoin strategists say the token may not have reached a bottom yet.
"Bitcoin remains in a larger bear-market structure," 10X Research wrote in a note on Thursday. "In the absence of a strong catalyst and with positioning still stretched, downside risks remain elevated."
Notably, the firm points to a significant overhang — overexposed bitcoin ETF holders who are underwater, with an estimated average acquisition price near $90,000.
A similar dynamic is playing out with ethereum (ETH) ETFs, as investors are down approximately 31% given their average cost basis, according to 10X Research data. Ether, the second-largest cryptocurrency, sank 13% on Thursday.
"Under these conditions, attracting incremental allocations from Wall Street investors becomes increasingly difficult, particularly when many existing holders likely regret not reducing exposure at significantly higher levels," 10X said in its note.
Bitcoin's slump on Thursday continued a deepening sell-off after Treasury Secretary Scott Bessent suggested the US government would not bail out the cryptocurrency.
In a heated back-and-forth during a House Financial Services Committee hearing on Wednesday, Bessent was asked if the US Treasury had the authority to buy bitcoin or other cryptos.
"I do not have the authority to do that, and as chair of FSOC, I do not have that authority," Bessent said.
Bitcoin's decline was also fueled by the broader selling pressure in markets and an earlier warning from notable investor Michael Burry that a sustained decline in bitcoin's price could "set in motion a death spiral leading to massive value destruction."
"Bitcoin has been exposed as a purely speculative asset, and is not near the debasement trade hedge that gold and other precious metals are," Burry, who rose to prominence after predicting the 2008 financial crisis, wrote on his Substack earlier this week.
The token is down roughly 27% year to date, with selling pressure intensifying last weekend after Kevin Warsh was nominated as the next Fed chair, a move widely viewed as hawkish for cryptocurrencies.
In January, bitcoin recorded its fourth consecutive monthly loss.
By Ines Ferré - Senior Business Reporter
