Bitcoin drops to lowest since November 2024

Bitcoin has recently fallen to its lowest price since November 2024, now valued at around $82,000. This drop comes after it hit a record high of over $109,000 on January 20. Many investors had high hopes for Bitcoin's future, hoping for further gains due to pro-crypto policies from the new Trump administration. However, the market has turned, and Bitcoin is down about 25% from its peak. Historically, Bitcoin has experienced significant price shifts. Cathie Wood from Ark Invest noted that Bitcoin has lost 77% or more of its value at least five times in the past. While this downturn is concerning, it is less severe than past declines. Long-term investors are advised to remain patient, as Bitcoin has shown strong performance over various time periods. According to Wood, Bitcoin has averaged annual returns of 44%, far surpassing most other major asset classes. Interestingly, Bitcoin's volatility appears to be decreasing. Current data shows that Bitcoin's 30-day price fluctuations have been below 4% for the last two years, compared to much higher volatility rates in earlier years. Despite recent market turbulence, this trend of lower volatility could signal stability over time. However, perceptions of Bitcoin are changing among investors. Many are questioning its role as a safe haven asset, especially as it has been falling alongside stock markets. Recent data shows significant outflows from Bitcoin exchange-traded funds (ETFs) and a shift towards gold ETFs, suggesting that investors see gold as a more stable store of value right now. For investors, the choice depends on their time horizon. Short-term investors may consider shifting their investments to gold. In contrast, those with a longer-term perspective are likely to choose to hold onto their Bitcoin, confident that it will eventually rise again.