Bitcoin hits lowest level since 2024, stocks stumble due to AI and geopolitical tensions
Bitcoin and stocks experienced a tumultuous day as the overall mood in markets turned nervous, causing the Dow to drop significantly by 360 points, translating to a 0.73% decrease. The S&P 500 also fell by 1.25% after briefly coming close to a record high, and the Nasdaq, representing tech-heavy stocks, was hit the hardest with a 2% decline. This challenging day for the markets was accompanied by bitcoin, which experienced a nearly 7% drop, leading it to hit its lowest level since November 2024, falling just below $73,000 before slightly rebounding to around $75,000.
Bitcoin, despite once being valued at over $126,000 back in October, has seen a rough decline of about 41%. This significant drop in Bitcoin’s value came as a surprise to some, especially since the Trump administration had plans to establish the United States as the “crypto capital of the world,” thus supporting pro-crypto policies. Nonetheless, Bitcoin’s ongoing struggles in the market remained evident, with continued sell-offs taking place and hindering any significant progress in its recovery.
While Bitcoin and stocks experienced losses, assets like gold and silver witnessed impressive gains, demonstrating periods of heightened volatility. Gold futures remarkably rose by 6.8%, trading at an astonishing $4,967 per troy ounce, and silver futures showcased an impressive 10% surge to approximately $84.78 per troy ounce. Gold, being a traditional safe-haven asset during times of uncertainty, has managed to outperform Bitcoin over the last five years, according to FactSet data.
Gerry O’Shea, the head of global market insights at Hashdex, pointed out that Bitcoin’s downward trajectory in comparison to gold is indicative of most investors favoring gold as the primary store-of-value asset amidst geopolitical tensions, currency debasement, and uncertainties surrounding macroeconomic conditions. O’Shea also added that Bitcoin is likely to exhibit continued volatility in the near future, given the industry’s pursuit of regulatory clarity and integration into mainstream financial systems. However, he remains optimistic about Bitcoin’s future potential, believing that its attractiveness will only increase over time.
Stocks faced challenges primarily due to the decline in technology and artificial intelligence sectors. Tech giants like Microsoft and Amazon experienced a 3.2% and 2.4% decline, respectively, while Nvidia, a prominent artificial intelligence company, fell by 4.1%, impacting the overall market performance. Despite the market’s enthusiasm about the AI industry, concerns lingered on Wall Street regarding the profitability and justification of extensive spending by companies in this sector. Microsoft, for instance, witnessed a significant 10% drop in share value, resulting in a staggering loss of nearly $360 billion in market capitalization.
