Bitcoin slides below $90,000 as traders grow cautious

Bitcoin fell below $90,000 for the first time in seven months on Tuesday, marking the latest sign that investor appetite for risk is drying up across financial markets.

The risk-sensitive cryptocurrency has lost all this year's gains and is now nearly 30% below a peak above $126,000 in October. It was last down 1.1% at $92,891, after slipping as low as $89,286.75.

Market participants said a combination of doubts around future U.S. interest rate cuts and the risk-averse mood in broader markets, which have wobbled after a long rally, was dragging down crypto.

CONFIDENCE CAN ERODE WITH REMARKABLE SPEED:

"The cascading selloff is amplified by listed companies and institutions exiting their positions after piling in during the rally, compounding contagion risks across the market," said Joshua Chu, co-chair of the Hong Kong Web3 Association.

"When support thins and macro uncertainty rises, confidence can erode with remarkable speed."

Speculators who had put money into crypto in the hopes of supportive U.S. regulation have started to pull back, causing steady outflows from ETFs and similar instruments in recent weeks, said Joseph Edwards at Enigma Securities.

"The sell pressure here isn't extraordinary, but it's coming at a relative weak point on the buy side ... a lot of retail buyers were stung during the flash crash last month," he said, referring to an October crash in which there were $19 billion in liquidations across leveraged positions.

Crypto stockpilers such as Strategy (MSTR.O), opens new tab, miners such Riot Platforms (RIOT.O), opens new tab and Mara Holdings (MARA.O), opens new tab, and exchange Coinbase (COIN.O), opens new tab have all slid with the souring mood.

There has been a boom in public crypto treasury companies this year, with small companies in unrelated sectors becoming crypto-proxies by announcing plans to buy and hold cryptocurrencies on their balance sheets.

But Standard Chartered Bank has estimated that a drop below $90,000 for bitcoin could leave half of these companies' bitcoin holdings "underwater" - a term which typically refers to holding assets worth less than what was paid for them.

Listed companies collectively hold 4% of all the bitcoin in circulation, and 3.1% of the ether, Standard Chartered said.

The biggest corporate holder of bitcoin, Strategy, has been adding to its stockpile. Founder Michael Saylor said the firm acquired 8,178 bitcoin on Monday.

As of Sunday, Strategy held 649,870 tokens at roughly $74,433 per bitcoin, Saylor said on X.

Cryptocurrency ether has also been under pressure for months and has lost nearly 40% of its value from an August peak above $4,955.

"All in all, sentiment is pretty low in crypto and has been since the leverage wipeout of October," said Matthew Dibb, chief investment officer at Astronaut Capital.

Bitcoin is the first decentralized cryptocurrency. Based on a free-market ideology, bitcoin was invented in 2008 when an unknown entity published a white paper under the pseudonym of Satoshi Nakamoto. Use of bitcoin as a currency began in 2009, with the release of its open-source implementation. From 2021 to 2025, El Salvador adopted it as legal tender currency before revoking it. As bitcoin is pseudonymous, its use by criminals has attracted the attention of regulators, leading to its ban by several countries. Bitcoin works through the collaboration of computers, each of which acts as a node in the peer-to-peer bitcoin network. Each node maintains an independent copy of a public distributed ledger of transactions, called a blockchain, without central oversight. Transactions are validated through the use of cryptography, preventing one person from spending another person's bitcoin, as long as the owner of the bitcoin keeps certain sensitive data secret. ?

Consensus between nodes about the content of the blockchain is achieved using a computationally intensive process based on proof of work, called mining, which is performed by purpose-built computers. Mining consumes large quantities of electricity and has been criticized for its environmental impact.