Btc tumbles as tariff threats and October flash crash deepen this year’s downturn
btc is trading well below its January highs after a string of losses that have left the world’s two largest cryptocurrencies with their worst starts to the year in more than a decade. The slide follows an Oct. 10 flash crash tied to tariff threats from President Donald Trump and has pressured exchanges, lenders and traders into a monthslong downturn.
Btc and Ethereum post worst starts of the year
On a year-to-date basis, btc is down almost 24% from Jan. 1 to around $67, 000, while Ethereum has fallen about 34% to about $2, 000. Those moves are the worst year-to-date performances on record, based on an analysis of public crypto price data that stretches back to mid-2013 for Bitcoin and mid-2014 for Ethereum.
Tariff threats, Oct. 10 flash crash and the $19 billion wipeout
The downturn traces in part to a one-day implosion on Oct. 10, when traders saw more than $19 billion in leverage evaporate after President Donald Trump issued another set of tariff threats against China. That one-day event was the worst liquidation episode ever tracked by a crypto analytics firm, and bitcoin is down more than 46% since early October.
Exchanges, lenders and suspended withdrawals
Market strain has shown up in corporate results and operational stress. Major crypto exchanges reported poor fourth-quarter results, and some traders remain deep in the red. A crypto lender and hedge fund named BlockFills suspended customer withdrawals earlier in February; public reports say the firm is now looking for a buyer and has losses of more than $75 million. A spokesperson for BlockFills declined to comment.
Crypto diverging from stocks and metals rallying
Although crypto price moves have often tracked broader equities, the two asset classes diverged over the past two months. Since January the stock market nudged upward, with the S&P 500 up about 0. 4% and the Dow Jones risen about 2. 3%. At the same time, metals have performed strongly to start the year: gold has risen about 17% and silver about 14%.
“Crypto Winter, ” confusion and faint reasons for optimism
That divergence has prompted talk of a Crypto Winter. Danny Nelson, a research analyst at crypto asset manager Bitwise, said, “We’re certainly in a Crypto Winter, ” adding, “You can tell by how investors react to good news. (They don’t. ). ” Nelson also offered a more forward-looking note, saying, “Crypto’s reality is getting stronger, ” and, “These changes are going to last well beyond the current downturn. ” Tom Lee, cofounder of an analysis firm and a noted Ethereum booster, said, “We’re really close to the end. ”
The monthslong decline has left many in the industry puzzled: prior bear markets followed explicit collapses such as the fall of FTX in November 2022, while this downturn has lacked a single obvious catalyst even as the industry has continued to see acceptance among U. S. regulators and increased interest from Wall Street. Those contradictory signals have produced both alarm and guarded optimism among some analysts.
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Ben Weiss is a crypto reporter.
