‘Wildcat Banking’: Bitcoin Prices Plunge as Crypto Selloff Picks Up Pace

Is the long-anticipated crypto winter finally upon us? If Thursday’s trading is any indication, it might be. Bitcoin prices have now plunged more than 15 percent in the past 24 hours, and are headed into Friday down 50 percent since hitting all-time highs above $126,000 in early October.By late Thursday afternoon, Bitcoin was trading below $63,000 for the first time since President Trump was elected as America’s first self-proclaimed “crypto president” in November 2024.Aaron R. Day, who advocates for decentralized economic systems, noted in an X post on Thursday that it now costs as much as $20,000 more in energy and other costs to mine a Bitcoin than current Bitcoin prices.The financial analysis blog Coastal Journal says Bitcoin has been a bubble ready to pop since prices reached more than $100,000 last year.“History, once a mere metaphor, now serves as a stark warning. The closest parallel isn’t an asset bubble like the tulip or housing market — it’s wildcat banking,” the Coastal Journal reported. “The core flaw remains the same: private “money,” assumed liquidity, and confidence that drove the speculation. However, the speed of the current situation is unprecedented. In crypto, the run doesn’t take months; it can happen in weeks.”“The crisis doesn’t start when the crypto falls,” it goes on to say. “It starts when everyone tries to convert the crypto into dollars at the same time — and discovers how shallow the exit really is when there are no longer any fools.”Another analyst, James Butterfill, of the digital asset investment firm Coinshares, says there are several factors contributing to the outflow from investments in Bitcoin and other cryptocurrencies. He says President Trump’s nomination of a more pliable Federal Reserve chairman in Kevin Warsh, heighted geopolitical volatility, and selling by so-called crypto whales, or people with large holdings of the digital assets are the biggest issues weighing on the market.Digital market veterans say the cryptocurrency market has entered a prolonged period of stagnant or declining prices, often characterized by negative investor sentiment and significant losses. A veteran trader who rose to prominence by predicting the 2008 housing crash, Peter Brandt, told his nearly one million X followers this week that the outflows appear to be coordinated efforts by large holders of Bitcoin to sell off a significant amount of the cryptocurrency.Market data analytics company CryptoQuant says demand for cryptocurrencies has reversed materially among intuitional investors. It says selling pressure has grown as trading funds have shed digital assets. “Bitcoin has broken below its 365-day moving average for the first time since March 2022,” CryptoQuant reports. It adds that the current price collapse is worse than a 2022 bear phase.Crypto crashes are not new, however. In 2018, Bitcoin tumbled 74 percent and crashed again in 2022 after the collapse of crypto firm FTX shattered investor confidence.On Wednesday, the treasury secretary, Scott Bessent, further spooked the digital asset market when he told a congressional committee that there would be no government bailout if crypto prices continue to plunge. Mr. Bessent told the House Financial Services Committee the government cannot direct private purchases of Bitcoin or use the banking system as a tool to prop up the market.But not everyone is bearish. Corporate bitcoin investor MicroStrategy continues to purchase Bitcoins despite currently being underwater in its investment. The company’s founder, Michael Saylor, said that MicroStrategy bought an additional 855 Bitcoin this week and now holds more than 700,000 Bitcoins with an average purchase price of $76,000. The company’s stock was down more than 14 percent on Thursday and 30 percent in the past month.

‘Wildcat Banking’: Bitcoin Prices Plunge as Crypto Selloff Picks Up Pace

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