Market value evaporates by 600 billion! Faith shaken, institutions on the sidelines—has the curse of Bitcoin’s "post-halving crash" come true?

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After reaching a historic high in October this year, Bitcoin's price has plunged sharply in recent days, at one point wiping out all gains made in 2025.

Yesterday, Bitcoin's price briefly fell below $93,714. This level is already below its closing price at the end of 2024, meaning that the more than 30% gain achieved earlier in the year has been “completely erased.”

Latest data shows that compared to the peak in October, over $600 billion in Bitcoin’s total market value has evaporated. This rapid, fierce, and trigger-less decline caught the entire market off guard.

For an asset where volatility is the norm, what’s different this time is the unprecedented speed at which market confidence has vanished. This round of decline comes in a year that was supposed to have solidified Bitcoin’s legitimacy—the approval of spot ETFs brought crypto assets into mainstream investment portfolios, and public support from the Trump administration further injected strong momentum into the market.

Yet, reality has failed to meet expectations. Anxiety is spreading across trading rooms and social media; traders are revisiting old charts, trying to find answers from history.

First prosperity, then depression—halving cycle repeats?

According to a recent Bloomberg analysis, in the absence of traditional financial asset frameworks, some market players have defaulted to the model they know best: the quadrennial “halving” cycle. Historically, this mechanism that halves new Bitcoin supply often triggers speculative booms followed by painful busts.

In this cycle, the halving happened in April 2024. Bitcoin price then peaked in October this year, roughly in line with previous patterns. However, with deep-pocketed institutional investors now reshaping the market, whether this old script remains valid is now uncertain.

Matthew Hougan, Chief Investment Officer at Bitwise Asset Management, believes that “People are worried that the four-year cycle could repeat itself and don’t want to experience another 50% correction. Therefore, they withdraw from the market in advance to avoid risk.” This very anxiety about a historical repeat may itself create selling pressure.

Weak market sentiment, shaken bull conviction

This round of decline also reflects exhaustion and disappointment within the market. Some retail investors suffered heavy losses when chasing high-flying crypto concept stocks. Then, the unexpected escalation of trade tensions in early October, coupled with soaring leverage, triggered massive liquidations. As a result, the market had excessive expectations for the future, but actual conviction was extremely fragile—once sentiment reversed, it could not absorb the selling pressure.

Jake Kennis, analyst at crypto data firm Nansen, pointed out, “At present, Bitcoin is trading more like a macro asset embedded in institutional portfolios, with sensitivity to liquidity, policy, and dollar dynamics surpassing its response to predictable supply shocks.”

Despite constant discussions of institutionalization, trading in the market is still largely sentiment-driven. But for now, the market’s mood is grim, and risk appetite has reversed.

Institutional inflows stall, premium disappears

Mid-year, Bitcoin spot ETFs attracted billions of dollars in inflows and successfully repositioned Bitcoin as a macro hedging tool. Recently, however, such inflows have stalled.

Some long-term holders have chosen to cash out and exit the market, and for industry representatives like Strategy Inc., share prices have neared the value of their Bitcoin holdings—a clear signal that the market is no longer willing to pay a premium for the “conviction” of holding Bitcoin.

This phenomenon indicates that even institutional investors’ enthusiasm has cooled. When even the staunchest supporters no longer earn extra rewards from the market, broader investor confidence is naturally undermined.

Macroeconomic headwinds and competition from alternative assets

The pro-crypto stance of the Trump administration hasn’t shielded Bitcoin from macroeconomic headwinds. Meanwhile, it also faces fierce competition from new speculative favorites like artificial intelligence (AI), stablecoins, and prediction markets. With gold and stocks hovering near historical highs, Bitcoin’s performance is lackluster by comparison.

Mike McGlone, Senior Commodity Strategist at Bloomberg Industry Research, stated that Bitcoin is “the tip of the risk asset iceberg, and it’s melting.” He expects “Bitcoin and most cryptocurrencies to continue falling.”

Even though the market infrastructure remains intact, the recent plunge is undoubtedly a heavy blow for those investors who once hoped Bitcoin would hit $200,000 by year end.

Eric Balchunas, ETF analyst at Bloomberg Industry Research, believes that traders’ anxiety about history repeating itself may have “led to the self-fulfillment of the four-year cycle.” But he also noted that “the typical rhythm may be temporarily disrupted, or permanently changed.”

Derek Lim, Head of Research at crypto market maker Caladan, offered another view: he believes the bull markets in 2017 and 2021 were not simply caused by halvings, but by “a more powerful, more fundamental driver: global liquidity.” He added that as the US government shutdown ends, such liquidity may return.

Risk Warning and DisclaimerMarkets are risky; investments require caution. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation, or needs of any particular user. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their specific circumstances. Investments made accordingly are at your own risk. ```