Bitcoin Bounces Off Lows — But 2025 Gains Have Basically Vanished

With input from the Guardian, CNN, Al Jazeera, CNBC, and Reuters.

Bitcoin is trying to claw its way back, but the damage has already been done.

The world’s biggest cryptocurrency briefly dropped below $90,000 for the first time in seven months, wiping out all of its gains for 2025 and underscoring how fast investors are backing away from risk.

By Tuesday afternoon in Europe, bitcoin had recovered a bit, trading around the low $93,000s after touching roughly $89,300 at the lows. That still leaves it down nearly 30% from its record above $126,000 in October.

Zoom out, and the pain is broader: about $1.2 trillion in value has been erased from the overall crypto market in just six weeks, according to CoinGecko.

So what changed? In short: the mood.

Investors are increasingly questioning whether the US Federal Reserve will cut interest rates as much or as quickly as they’d hoped. Higher-for-longer rates tend to hurt the most speculative assets first — and bitcoin is firmly in that bucket.

At the same time, global markets are wobbling after a huge run-up in AI and tech stocks, with more talk about a possible AI bubble. When stocks feel expensive and uncertainty rises, traders usually dump the riskiest stuff first. Crypto is right at the front of that line.

One derivatives executive summed it up bluntly: near term, the “path of least resistance” for bitcoin still looks lower, even if bold dip-buyers have been rewarded in past crypto cycles.

The recent slide hasn’t been driven by a single shock, but by several overlapping pressures:

• Institutions and listed companies that piled into bitcoin during the rally are now cutting exposure, amplifying the selloff and spreading stress across the market.
• US spot bitcoin ETFs have seen billions in outflows since early October as hopes for friendly regulation and easy gains have faded.
• Many retail traders were hammered during a violent flash crash last month that triggered around $19 billion in liquidations of leveraged positions. A lot of them simply stepped away afterward, leaving order books thinner and prices more vulnerable to sharp moves.

As one broker put it, the selling itself isn’t extreme — but it’s hitting at a time when the buy side is weak, so each wave of selling has a bigger impact.

Crypto-adjacent stocks have slid in sympathy. Treasury-style bitcoin hoarders, mining firms like Riot Platforms and Marathon, and exchange Coinbase have all been dragged lower alongside the token, even if some names bounced intraday as bitcoin stabilized.

Another wrinkle in this cycle is the rise of “crypto treasury” companies — smaller firms in totally unrelated sectors that have turned themselves into de facto bitcoin trackers by loading their balance sheets with crypto.

That trade is starting to hurt. Analysts at Standard Chartered estimate that a sustained break below $90,000 could leave around half of these companies’ bitcoin holdings underwater — meaning the coins are worth less than what they paid.

In total, listed companies now hold about 4% of all bitcoin in circulation, plus roughly 3.1% of all ether. That institutional footprint makes crypto more intertwined with the equity market than ever.

Some are still doubling down. Strategy, the largest corporate bitcoin holder, has kept adding to its stash and now controls hundreds of thousands of tokens at an average purchase price in the mid-$70,000s, according to its latest disclosures.

It’s not just bitcoin feeling the pressure. Ether (ETH), the second-largest crypto, has been grinding lower for months and is now down almost 40% from its August high above $4,955.

Altcoins generally have fared even worse. Leverage was flushed out in October’s wipeout, sentiment has stayed depressed, and there hasn’t been a fresh narrative strong enough to pull new money in.

“Overall, crypto sentiment has been pretty grim since that leverage washout in October,” one fund manager said, noting that lower liquidity means even moderate selling can move prices quickly.

The crypto slide is happening alongside a broader rethink of tech valuations, especially anything tied to AI.

• The Nasdaq 100 is off more than 4% this month.
• Trillion-dollar names like Nvidia, Amazon, and Microsoft have all taken hits as investors question whether the AI spending boom can deliver profits fast enough to justify sky-high prices.

Because many large tech investors also hold big crypto positions, the two trades are increasingly moving together. One strategist called the link between this week’s tech selloff and bitcoin drop “undeniable.”

Another market veteran warned it’s “the tail wagging the dog” when a $1.8 trillion speculative crypto asset is helping steer a $32 trillion stock index.

If you’ve been around crypto for a while, this script probably sounds familiar: big run-up, shaky macro backdrop, forced unwinds, then hand-wringing about whether “this time is different.”

Some industry insiders argue that as brutal as it feels, this kind of 20%–30% pullback is normal for bitcoin — and often a reset before the next big rally.

Bitcoin briefly dipping under $90,000 “doesn’t change the bigger picture,” one layer-2 founder argued, saying each cycle needs these air-pocket drops to clear out leverage and weak hands.

The question now is whether this is a deeper reset that drags on for months or just a sharp shock in an ongoing bull cycle. A lot may depend on what happens next with:

• US interest rate expectations;
• The AI/tech trade in stocks;
• And whether fresh money is willing to step in after such a violent shakeout.

For the moment, bitcoin is at least moving in the right direction again — edging higher off the lows. But until it can put real distance between itself and that $90,000 line, 2025 is, effectively, a round trip.