Bitcoin has slipped below $90,000 for the first time in seven months, erasing all of its gains for 2025 and highlighting waning investor appetite for risk in global financial markets. The cryptocurrency began a modest rebound on Tuesday as US markets opened, but the previous day’s sharp decline underscored ongoing volatility in the crypto sector.
“The cascading selloff is amplified by listed companies and institutions exiting their positions after piling in during the rally, compounding contagion risks across the market,” said Joshua Chu, co-chair of the Hong Kong Web3 Association.
Cryptocurrency Market Wipes Out $1.2 Trillion
Over the past six weeks, $1.2 trillion has been wiped off the total market value of all cryptocurrencies, according to market tracker CoinGecko. Bitcoin’s recent decline puts it nearly 30 percent below its all-time high of $126,000 in October. During European trading hours on Tuesday, Bitcoin traded around $91,338.47, after hitting a low of $89,286.75.
Ethereum (ETH) has also been affected, losing almost 40 percent of its value since its August peak above $4,955, reflecting broader weakness across digital assets.
Factors Behind the Decline
Market analysts cite a combination of factors contributing to the crypto slump:
- US Federal Reserve Interest Rate Uncertainty: Investor doubts over future interest rate cuts have increased caution in risk assets.
- Risk-Averse Market Sentiment: Following a long rally, broader financial markets have become volatile, influencing crypto performance.
- Institutional and Retail Sell-Offs: Institutions and retail investors who had entered the market during the rally are now exiting positions.
“When support thins and macro uncertainty rises, confidence can erode with remarkable speed,” added Chu.
Joseph Edwards of Enigma Securities noted that speculators who invested in crypto anticipating supportive US regulation are beginning to pull back, leading to consistent outflows from cryptocurrency ETFs and exchange-traded instruments.
Impact on Crypto Companies and Stockpilers
Public companies holding cryptocurrency on their balance sheets have also been affected. Notable examples include Riot Platforms, Mara Holdings, Coinbase, and other miners and exchange platforms, which have seen their stocks decline alongside Bitcoin.
Standard Chartered warned that if Bitcoin remains below $90,000, half of these corporate holdings could be “underwater,” meaning their assets would be worth less than the purchase price. Currently, listed companies collectively hold 4 percent of Bitcoin in circulation and 3.1 percent of Ethereum.
The trend has implications for smaller firms that adopted Bitcoin and other cryptocurrencies as treasury assets, turning them into de facto crypto proxies.
Investor Sentiment and Outlook
Matthew Dibb, chief investment officer at Astronaut Capital, noted that market sentiment remains low, particularly following the October leveraged wipeout, which saw $19 billion in liquidations. The combination of macroeconomic uncertainty and residual effects from the flash crash has kept investor confidence subdued.
“All in all, sentiment is pretty low in crypto and has been since the leverage wipeout of October,” Dibb said.
While some recovery is possible as markets stabilize, analysts caution that Bitcoin and Ethereum remain vulnerable to swings in interest rate expectations, regulatory announcements, and institutional behavior.
Conclusion
Bitcoin’s decline below $90,000 marks a critical juncture for cryptocurrencies in 2025. With institutional holdings potentially underwater, ongoing market volatility, and cautious investor sentiment, digital assets face continued uncertainty. The next few months will be crucial in determining whether Bitcoin and Ethereum can regain momentum or face prolonged consolidation.
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