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Bitcoin gets slashed in half. What’s behind the crypto’s existential crisis

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Bitcoin tumbled toward $60,000 this week as investors reassessed its utility. And while there isn’t one clear catalyst driving the bloodbath, one thing is clear: the crypto market is in crisis. 

“There’s nothing going on in the marketplace that should have necessitated this type of a crash,” Anthony Scaramucci, founder and managing partner of alternative investment firm SkyBridge, told CNBC. “And so I think that’s made people, frankly, more fearful. … You have to ask yourself, ‘is it over for bitcoin?’”

Bitcoin fell as low as $60,062 on Thursday, bringing it to its lowest level since Oct. 11, 2024. That’s more than 52% off from its record high of $126,000 hit in early October 2025.  

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The previous session marked one of bitcoin’s bloodiest ever, with the token shedding more than 15% on the day. Its daily relative strength index fell to 18, putting the asset in extremely oversold territory. As of Thursday, other digital assets like ether and solana were also down 24%  and 26% for the week to date, respectively — a sign investors’ confidence in the entire crypto market is faltering.

Bitcoin bounces, but losses loom large

Bitcoin was rebounding on Friday, with the token last trading at $69,631.97, up more than 9% on the day.

But, its recent drawdown has prompted investors to re-evaluate its utility, including its role as a digital currency or as a store of value. Simultaneously, institutional appetite for the flagship crypto appears to be waning as spot bitcoin exchange-traded funds record outsized outflows, threatening to drive bitcoin deeper into the red. 

“This time is markedly different from other bear markets, however, in that it’s not in response to a structural blowup,” Jasper De Maere, desk strategist at crypto market-making firm Wintermute, said in a statement shared with CNBC. “It’s a fundamentally macro-driven deleveraging tied to positioning, risk appetite and narratives rather than systemic failures within crypto itself.”

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Bitcoin prices over the past year

Over the past few months, investors have grown increasingly skeptical of efforts to recast bitcoin as “digital gold,” or an alternative to traditional safe havens such as gold. Bitcoin is down 28% over the past 12 months, while gold is up 72% during the same period — a testament to the latter’s utility as a hedge against macro risks.

Conversely, bitcoin has often traded down alongside other risk-on assets such as equities amid periods of high macroeconomic and geopolitical uncertainty, raising doubts about its utility as a safe haven. Nearly a week after Trump’s “liberation day” tariff announcement on April 2, 2025, bitcoin had fallen about 10% to below $80,000, while the S&P 500 had declined roughly 4%. 

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Separately, investors are also reassessing the extent to which financial institutions, treasury firms and governments are willing to adopt bitcoin — a major catalyst for the token in recent years. 

Large institutional outflows are mounting as investors brace for bitcoin to go lower, thinning liquidity for the token, according to a recent analyst note from Deutsche Bank.

Those outflows are also noticeable among spot bitcoin ETFs in recent months, according to the investment firm. The funds have seen outflows of more than $3 billion in January, in addition to roughly $2 billion last December and about $7 billion last November.

Additionally, a swath of Strategy copy-cats that emerged over the past year or so have slowed or paused their bitcoin purchases amid the digital asset’s correction.

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Finally, traders have acknowledged that long-time efforts to market bitcoin as an alternative to fiat currencies have largely faded. While Steak ‘n Shake and Compass Coffee have rolled out support for bitcoin payments in recent years, initiatives to make the asset a form of payment have largely died, particularly as interest in dollar-pegged stablecoins grows, according to Bitwise’s Ryan Rasmussen. 

“We’re seeing Wall Street adopt stablecoins because it is a fundamental transformation of the way payments work, and bitcoin is just a different asset. It’s not meant for that today,” Rasmussen said, arguing that the token’s purpose has evolved from that of a currency to a decentralized, non-governable store of value. “I’ve never paid for coffee or a sandwich with Bitcoin, and I never will.”

And beyond those more immediate concerns, investors are also increasingly worried that bitcoin’s underlying network could be hacked, driving the token to zero. 

“It certainly is a risk that is seeing more attention from investors as they’re getting more worried about [it], and I think you’re seeing a little bit of that risk priced into bitcoin,” Rasmussen said.

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He noted that Bitwise has allocated funds toward efforts to mitigate the threat from quantum computing.

Nevertheless, traders’ appetite for bitcoin has largely dwindled, denting its price. That’s true even as long-time believers are still proudly betting on bitcoin, despite of the charts and the naysayers. 

“I believe that the story is intact,” said Scaramucci, adding that he bought bitcoin for his fund on Thursday. “But, I don’t have a crystal ball. … Who the hell knows.”

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Crypto World

Oil Rose 3% to Open the Week: Here’s What Moved the Market on Monday

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Oil prices jumped more than 3% on Monday, pushing Brent crude above $116 a barrel. West Texas Intermediate (WTI), the US benchmark, climbed to roughly $102 per barrel.

The latest rise comes as the US-Israel war on Iran entered its fifth week with no signs of abating.

Oil Extends Its War-Fueled Rally 

Several escalatory developments over the weekend fueled the surge. President Donald Trump told the Financial Times he could possibly seize Kharg Island, the terminal that handles roughly 90% of Iran’s crude exports.

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The US president struck a mixed tone on diplomacy with Iran, saying he was “pretty sure” of making a deal with Iran but conceding that talks could still collapse.

Meanwhile, Iran’s parliament speaker warned that Tehran would “set them on fire” when American forces arrived and promised consequences for US-allied nations in the region. 

The oil price surge is far from over, according to market analysts, who warn that the prolonged closure of the Strait of Hormuz could drive crude even higher.

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“A scenario in which the Strait remains closed for an additional month would be consistent with oil prices rising towards $150/bbl and constraints on industrial consumers of energy supply,” Bruce Kasman, global head of economics at JPMorgan, said.

According to Bloomberg, US officials and Wall Street analysts have also begun discussing the possibility of crude reaching $200 per barrel.

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Asian Stocks Tumble, Crypto Feels the Pressure

The energy shock rippled across Asia. Google Finance data showed that Japan’s Nikkei 225 fell over 4.5%, while South Korea’s KOSPI dropped more than 4.3% as import-dependent economies repriced risk.

The volatility has spread to crypto markets, with asset prices dipping early in the morning before rebounding. 

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“The market briefly crashed just now — ETH dropped below $1,940 and BTC fell below $65,000,” Lookonchain reported.

Oil above $100 per barrel continues to pressure risk assets by fueling inflation expectations and delaying anticipated Federal Reserve rate cuts.

The post Oil Rose 3% to Open the Week: Here’s What Moved the Market on Monday appeared first on BeInCrypto.

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Lido DAO Mulls $20M LDO Buyback to Boost Token Price

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Lido DAO Mulls $20M LDO Buyback to Boost Token Price

Lido’s decentralized autonomous organization is considering a one-off $20 million buyback of its governance token to address so-called price dislocation, which is at “historically depressed levels” relative to Ether, according to the DAO. 

The proposal, submitted Friday, seeks permission to swap 10,000 Lido Staked Ether (stETH) tokens, currently worth $20 million from the DAO’s treasury for Lido DAO (LDO), arguing that LDO is undervalued.

“This is not a routine fluctuation. It represents one of the most significant dislocations between LDO’s market price and its underlying protocol fundamentals in the token’s history.”

A token buyback of this size could boost the price of the token, which has fallen roughly 96% from its all-time high. In November, a Lido DAO member pitched an automated buyback mechanism for LDO to improve the token’s price. However, that proposal hasn’t been implemented.

LDO’s change in price relative to ETH since 2024. Source: Lido DAO

Lido DAO pointed out that LDO is trading at a steep discount to Ether (ETH) at a ratio of 0.00016, roughly 63% below its two-year median.

This is despite the protocol holding the top spot of the Ethereum liquid staking market, with a 23.2% share of staked Ether, according to Dune Analytics data. The protocol’s dominance has even been flagged as a centralization risk to the network in previous years.

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Share of Ethereum network validators. Source: Dune Analytics

Related: Ethereum builders propose ‘economic zone’ to tackle L2 fragmentation 

LDO is currently trading at $0.30, down 95.9% from its $7.30 high set in August 2021, according to CoinGecko data. LDO’s $255 million market cap makes it the 141st largest token by value at the time of writing.

“That dislocation is not justified by a proportional deterioration in protocol performance,” Lido DAO said. 

Lido DAO proposes buying stETH in batches

Lido DAO proposed buying up to 10,000 stETH in smaller batches of 1,000 to buy LDO. 

Lido DAO said it would use limit orders or adopt a dollar-cost averaging strategy to avoid market volatility. 

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