The world's largest cryptocurrency sank as low as $59,099 on Friday, dragging it back beneath the level it sat at on the night Donald Trump won the U.S. presidential election in November 2024. That was supposed to be the turning point, the moment crypto finally got a friend in the White House and an open runway higher. Instead, eighteen months and one $126,000 peak later, bitcoin has given all of it back, plus a bit extra for good measure. Anyone who bought on election night and held through the entire "crypto president" era is now sitting on a loss, which is not exactly the bedtime story the industry's biggest cheerleaders were telling a year ago.

The slide did not happen in one dramatic afternoon. It has been more of a slow leak that turned into a flood this week, with bitcoin shedding close to 20 percent of its value in a matter of days. A hot U.S. jobs report on Friday made things worse by killing off whatever hope traders had left for an interest rate cut, and instead got markets pricing in the opposite outcome, a possible hike. Add in stubbornly high inflation numbers and a market that was already on edge, and you get the kind of session where every green candle gets sold into almost on principle.

Saylor breaks his own rule, and the market panics anyway

Some of the freshest pressure traces back to a name longtime bitcoin watchers never expected to see attached to a sell order: Michael Saylor. His company, Strategy, offloaded 32 bitcoin earlier this week at an average price near $77,000, banking roughly $2.5 million to help cover preferred stock dividend payments. In the context of a treasury that still holds more than 843,000 BTC, that sale amounts to a rounding error, something like 0.004 percent of the stack. But symbolism has always carried weight in crypto, and the idea of Strategy selling at all, after years of "never sell" sermons from its chairman, was enough to spook a market that was already looking for reasons to run.

The reaction snowballed from there. Spot bitcoin ETFs are now in the middle of their longest outflow streak since they launched in early 2024, with total fund assets dropping from roughly $107.8 billion in mid-May to about $82.8 billion now. That is not a rounding error. Billions of dollars have quietly walked out the door over a couple of weeks, and when the buyers who powered last year's rally start acting like sellers, the floor underneath the price tends to disappear fast. Liquidation data backs that up too, with well over a billion dollars in leveraged long positions wiped out across the derivatives market in a single 24-hour stretch.

The money did not vanish, it just found a flashier party

Here is the part that should sting bitcoin's biggest believers more than the price chart does: the capital pulling out of crypto does not appear to be hiding under a mattress. It is rotating straight into AI stocks and the wave of blockbuster IPOs from companies like SpaceX and Anthropic that have investors buzzing about the next big payday. Analysts at K33 and elsewhere have been warning for weeks that bitcoin would struggle as long as the AI trade kept handing out bigger, faster headlines. Apparently they were onto something, because that is exactly what has been happening, and the opportunity cost of parking money in a sideways or falling bitcoin looks worse every day that the AI darlings keep climbing.

None of this means bitcoin is finished, and plenty of traders who have lived through past 50 percent drawdowns will tell you this is just another rough patch for an asset that is famous for testing nerves. CoinDesk's market desk noted that even some bitcoin bulls, like Bitmine chairman Tom Lee, are framing this slump as classic "bottom behavior," the kind of capitulation that tends to show up right before sentiment turns. Whether that call ages well or gets filed next to a hundred other bottom calls that did not pan out is the kind of thing only a few more weeks of price action will settle.

Bottom line

What is clear right now is that the easy "Trump is in office, so bitcoin only goes up" trade has officially expired, and the market is being forced to find a new story to tell itself. A 32-coin sale from Strategy should not have been able to rattle a multi-trillion dollar asset class on its own, and on its own it did not. It was simply the spark that landed on a pile of dry kindling made up of ETF outflows, a more hawkish rate outlook, and a louder, shinier trade sitting right next door. For traders riding this out, the next few weeks of jobs data, Federal Reserve commentary, and ETF flow reports will probably matter more than anything Michael Saylor posts online.

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Author: Cedric Holloway
New York Newsroom
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