Bitcoin’s appeal waning after meteoric surge – Japan Today
February 8, 2026
The largest cryptocurrency in the world, Bitcoin, took a significant hit last week, erasing previous gains fueled by Donald Trump’s victory in November of 2024. The digital currency plummeted to $60,033.01 on Friday, marking a substantial decline from its peak above $120,000 in October. Market analysts explain the reasons behind the decrease in prices.
Following Trump’s election, digital currencies experienced a surge due to the perception that he was a strong advocate of the technology. Trump openly praised Bitcoin’s milestone achievement of surpassing $100,000 for the first time in December of the same year. However, this rally faced a setback in April when Trump introduced extensive U.S. tariffs, causing a global market slump. Bitcoin later resumed its upward trajectory, along with stocks and other markets, reaching a record high of $126,251.31 six months later. Yet, the excitement has dwindled due to investors’ frustration over regulatory uncertainties.
Despite Congress passing legislation in July to regulate stablecoins, a broader cryptocurrency bill, the Clarity Act, has not advanced in the Senate. As Deutsche Bank analysts Marion Laboure and Camilla Siazon suggest, Bitcoin’s ability to make a sustainable recovery hinges on the passage of the Clarity Act. The recent decline in precious metals such as gold and silver triggered a sell-off as investors sought to cash in on profits from their meteoric rise, exacerbating the drop in Bitcoin prices. Volatility across technology and precious metals led to a broader market distrust, prompting investors to reduce their risk exposure.
Further intensifying the sell-off was the forced deleveraging, where investors who leveraged borrowed funds to invest in Bitcoin had to sell off when prices began to slide, driving prices further down. The recent dip in cryptocurrency values coincided with a wider market sell-off of tech stocks due to renewed concerns about an artificial intelligence bubble. Cryptocurrency-related stocks often move in tandem with the price movements of Bitcoin and AI-related stocks, accentuating the link between both asset classes.
The current market downturn raises questions about the viability of digital asset treasury firms that hold significant amounts of cryptocurrencies in the hopes of future price gains. The potential sale of these holdings could flood the market and amplify a downward spiral in prices. Companies like Strategy, with a substantial Bitcoin reserve, experienced a significant drop in share value following a net loss related to the decline in cryptocurrency prices. The downturn’s repercussions were evident when U.S. cryptocurrency exchange Gemini announced a reduction in its workforce and planned withdrawal from several international markets amid the digital asset downturn.