<div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Bitcoin has tanked to its lowest level in more than a year as risk-averse investors flee the notoriously volatile asset.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>The world's most popular cryptocurrency fell to a low of $US60,074 ($86,836) this morning, having lost half of its value from a peak of $US126,000 ($194,895) in October last year.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>It's just the latest development in the dramatic drop in value for the cryptocurrency, with a 17 per cent decline this week and a 28 per cent drop so far this year.</span></div></div><div><div id="adspot-mobile-medium"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/capital-gains-tax-discount-australia-speculation-overhaul-federal-budget-2026/1fcd9f5b-370a-4045-a4c3-c00c4dbec466"><strong><span>$23 billion tax break could be overhauled in matter of months</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>So what is behind the price drop and why is it happening now?</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><h3><strong><span>Why is the Bitcoin price crashing?</span></strong></h3></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>There are a number of factors at play, but chief among them is a risk-averse approach investors are increasingly taking in financial markets amid global uncertainties.</span></div></div><div><div class="OUTBRAIN" data-reactroot="" data-src="//www.9news.com.au/finance/bitcoin-crash-why-is-it-happening-cryptocurrency-explainer/6bbe33c6-d1b5-4d56-a38a-7eae95b12ae9" data-widget-id="AR_5"></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Cryptocurrency is notoriously volatile – something there is little appetite for in the current financial environment.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Bitcoin has been swept up in all the 'risk-off' sentiment flowing through the market," CNN Business executive editor David Goldman wrote.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Rather than giving investors reason to buy, traders are seeing that fear as a reason to sell.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE: </span></strong><a href="https://www.9news.com.au/national/pub-tests-show-thousands-of-drinkers-ripped-off-over-drink-sizes/85131921-b40d-495c-803a-01ab9084cea0" rel="" target="" title=""><strong><span>Thousands of pub goers risk being ripped off with drink sizes, report says</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"The continued divergence between gold (up 24 per cent since October) and Bitcoin (down 50 per cent) has only solidified that sentiment."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Westpac economist Ryan Wells also pointed to the "risk-off tone" as a reason for Bitcoin's overnight dip, while Zerocap analyst Emir Ibrahim noted there was a sell-off across more speculative assets.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"This event was not isolated to crypto," he said.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Risk assets sold off in tandem, with a tech-led drawdown in equities and sharp reversals in commodities pointing to a broader 'dash for cash' environment."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Developments in Washington also haven't helped.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/front-to-kerb-parking-fine-sydney-council-signage/13e8841c-050c-4a36-9bb4-6d3929cb6585"><strong><span>The rule Karina broke is nowhere on this sign but she still copped a fine</span></strong></a></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Trump appointed Kevin Warsh as the next Federal Reserve chair of the central bank last Friday.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Crypto has typically performed well when the US central bank has had more liquidity in markets, but Warsh is considered an advocate of the opposite approach, having previously pushed for the Fed to take on a smaller balance sheet.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>There are also concerns about the future of cryptocurrency regulation in Washington, despite Trump heavily backing cryptocurrency companies since his election, with hopes of a more crypto-friendly administration in Washington stalling.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Treasury Secretary Scott Bessent didn't help matters yesterday, when he testified that his department has no authority to stabilise crypto markets.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><strong><span>READ MORE:</span></strong><span> </span><a href="https://www.9news.com.au/national/australia-weather-rain-and-storms-to-impact-entire-country/c1c681ab-e3b1-4b90-9936-0c52171af944"><strong><span>Huge weather turnaround to bring storms, floods for millions</span></strong></a><strong><span></span></strong></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><h3><strong><span>Will the Bitcoin price recover?</span></strong></h3></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>This is a big unknown.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Ibrahim said in the immediate future, a rebound is unlikely, although a longer-term bounce-back is possible.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"While near-term price action is likely to remain unstable below $US65,000 ($94,057), these types of flushes historically serve to clear excess leverage and reset positioning.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"The focus now shifts to whether spot demand can absorb supply at these levels and stabilise the market ahead of the next macro catalyst."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>Goldman noted, though, that this isn't new ground for Bitcoin – it has plunged and bounced back in the past.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"In 2014, crypto prices imploded after crypto exchange Mt. Gox was hacked," he wrote.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"The largest bust happened in 2018, when bitcoin tumbled 74 per cent, fueled by fear that the explosion of initial coin offerings was overdone.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"And crypto had back-to-back crashes in 2021 and 2022, after regulatory pressure and the FTX scandal shattered confidence.</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><span>"Each time, Bitcoin has bounced all the way back within a year and a half."</span></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><em><span>– with CNN, Associated Press</span></em></div></div><div class="block-content"><div class="styles__Container-sc-1ylecsg-0 goULFa"><em><span>The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.</span></em></div></div>