Experts Dissect Bitcoin’s Market Mystery

The Real Cause Behind Bitcoin’s Decline

Despite ongoing debates over tariffs and wars, we’ve witnessed the immediate effects of macroeconomic developments on market charts. Bitcoin’s price has been seesawing throughout the year. However, analyst Andre is confident that recent drops are not driven by macroeconomic factors. According to Andre, most of the downward performance can be attributed to Bitcoin-specific factors like Long-Term Holders (LTH) selling.

Indeed, while US tech stocks suffered losses alongside cryptocurrencies, crypto markets did not recover as expected. The rise in gold prices, usually supportive for Bitcoin, is fueled by monetary easing. Despite the growth of two major assets that Bitcoin typically follows, its current state—compounded by weakened market volumes and strengthening sales—remains troubling. This has been evident since October.

What Bitcoin Is Not

Bitcoin is not a hedge against inflation. We previously discussed BTC’s struggle while the Federal Reserve rapidly increased interest rates. Notably, macroeconomy expert Henrik Zeberg highlighted how BTC is actually a leveraged play tied to a strong economy and robust stock market.

Additionally, the CEO of BlackRock described Bitcoin as the “most competent asset for pricing fear.” A security that accounts so well for fear deserves to be shorted as a hedge. For BTC and cryptocurrencies to rise, liquidity must increase, political distractions from figures like Trump must cease, and the stock market must remain strong.

Yesterday, Trump reignited threats against Iran, with three years left in his term.

Zeberg further explained that while inflation stayed above 5%, BTC fell approximately 77%. He remarked that BTC had one significant opportunity to prove itself—and it failed miserably. The reality is BTC is a leveraged risk asset linked to a strong economy, strong stock market, and ample liquidity. It is a risk asset dropping harder than stock markets, not a hedge against inflation or devaluation. Unfortunately, without this understanding, many portfolios may continue suffering due to BTC.