Why has the price of bitcoin plummeted? Experts explain
The price of bitcoin plummeted about 10% over the past week as investors stampeded out of the world's most popular cryptocurrency.
Ethereum, the second-largest cryptocurrency, plunged even further, shedding nearly one-fifth of its value over the last week. Solana, another popular crypto coin, saw its price cut in half over that period.
Experts who spoke to ABC News attributed the decline in crypto prices to looming geopolitical and economic uncertainty, which prompted a momentum-driven selloff as crypto holders raced to the exits. The initial drop likely forced some leveraged buyers to sell off their positions, intensifying the downward pressure, they added.
"There are concerns about risk right now. The price of crypto tends to drop when investors look to take risk off the table," Bryan Armour, the director of passive strategies research at financial firm Morningstar.
"That may have precipitated the decline, and then it was like a snowball rolling downhill," Armour added.
The labor market has slowed in recent months, while inflation has hovered above the Federal Reserve's target rate of 2%.
Meanwhile, geopolitical conflict looms amid negotiations over Greenland, U.S.-backed leadership in Venezuela, the ongoing war between Russia and Ukraine, as well as escalating U.S. threats against Iran over the past few weeks.
In recent weeks, Trump has threatened tariffs against Canada, South Korea and eight European countries, invoking the tool as means of exerting pressure over a range of foreign-policy issues.
"Everything that's been happening the last few weeks is definitely adding a lot of nervousness in the market," Christian Catalini, founder of the MIT Cryptoeconomics Lab, told ABC News. "Anything that makes investors risk averse of course affects the price of bitcoin."
The recent drop in the price of bitcoin extends a prolonged selloff. The signature crypto coin stands about 40% below a peak attained in October 2025, Jim Reid, a research strategist at Deutsche Bank, noted in a memo to clients on Monday. Over that same period, the S&P 500 climbed 5% and the price of gold jumped 17%.
Bitcoin has fallen in each of the last four months, achieving that feat for the first time since the pandemic, Reid said.
To be sure, some analysts said the recent drop in bitcoin had hardly surprised them, considering the stratospheric heights achieved by the cryptocurrency last fall.
The price of bitcoin surged more than 40% in late-2024 after the election of President Donald Trump, who voiced support for cryptocurrency. Bitcoin declined over the ensuing months but soared again in October 2025.
"There's a natural limit to how high it can go up," Steve Sosnick, chief strategist at Interactive Brokers, told ABC News.
Bitcoin has proven highly volatile since its launch about 15 years ago.
As recently as 2022, bitcoin suffered a downturn that cut its value by more than 60%. A similar drop happened in each of the prior two years, when the pandemic helped trigger waves of buying and selling.
Despite its ups and downs, bitcoin has sustained an upward long-term trajectory. Over the past five years, the price has soared 96%, outpacing an 80% gain in the S&P 500 over that period. The price of bitcoin ticked up on Monday, recovering some of its losses over previous days.
The volatility of crypto makes it nearly impossible to predict where the price will go next, Armour said, adding that the only certainty may be more volatility.
The rise of bitcoin ETFs -- exchange-traded funds -- brought crypto deeper into traditional finance over the past two years, since such investment vehicles have allowed customers at large brokers to invest in crypto without holding the underlying asset.
Despite a broader set of investors, digital assets have continued to fluctuate in price.
"The best thing investors can do if they do want to get involved in bitcoin is to know their limitations," Armour said. "They shouldn't have high confidence in any one outcome."
