Bitcoin, the most relevant cryptocurrency in the world, has erased all the gains it had accumulated since Donald Trump's victory in the U.S. elections in November 2024 in just four months. The Republican leader, who positioned himself as the biggest advocate of the crypto world, has been unable to prevent a selling spree that has now reached nearly 50% from Bitcoin's highs at the beginning of last October, around $126,000, mainly driven by small investors who have been overwhelmed by a wave of money outflows that, so far, have not found an end.
Bitcoin's rise to the skies and subsequent fall to the depths has occurred within a span of fifteen months, and now analysts talk about the feared $60,000 level as one of extreme volatility due to a strong accumulation of options that will trigger if Bitcoin breaches this level, potentially unleashing a new selling cascade. However, those familiar with the crypto world downplay the declines of recent months and see the correction as part of Bitcoin's life cycle, with very pronounced highs and lows. What is striking is that with this natural tendency to slide around the curves, the direct comparison between those who defend its role as a safe haven asset with gold, which has recently clearly tilted the balance in its favor, even though its price has corrected by 9% from the highs of January 29, above $5,300 per ounce, an unprecedented level.
Gold has made a statement and prevailed. The rise to highs combined with the cryptocurrency's debacle has led to the assets under management of gold ETFs soaring to nearly $350 billion, compared to the $80 billion of Bitcoin funds, when in December 2024, just over a year ago, the differential was minimal: around $4 billion. From eToro, Javier Molina, points out that gold "has a structurally conservative buyer base (central banks, sovereign wealth funds, wealth managers...) and is barely exposed to systemic leverage dynamics. In a context of geopolitical tensions, monetary uncertainty, and institutional distrust, gold absorbs capital seeking stability and preservation." This is the key lesson that the crypto world has learned in recent months, understanding how the high degree of leverage affects its price, with traders in crypto multiplying sales when large investors are forced to cash in what they borrowed due to Bitcoin's price drop.
"The derivatives market" on this cryptocurrency is ten times larger than the real market, known as the spot, which trades through ETFs and "amplifies its movements," concludes the expert.
Optimism is not helped by the opinions of major investment gurus like Michael Burry, known for becoming a billionaire by betting against the U.S. real estate market before the subprime crisis hit. In his view, as reported by Bloomberg, Bitcoin's collapse could lead to a kind of "death spiral" if it continues into a bear market. This is where the concept of crypto winter comes into play, understood as a period of drastic correction that usually occurs about 18 months after each halving. Some argue that this period began in January, while others believe the situation is different now thanks to institutional investors entering since 2024. Beyond Bitcoin, which represents about 55% of the total market capitalization of cryptocurrencies worldwide, other digital currencies like Ethereum, Solana, XRP, USDC, or Binance's coin are experiencing drops ranging from 30% to 40% in the last 30 days in many cases.
Symptomatic actions are taking place. One of them is that the ETFs launched in the U.S. two years ago are incurring losses. What they paid to buy Bitcoin then is now worth less in the market. Never before, in their short history of just over two years, have these funds experienced such an outflow of money from their investors. In April 2025, the major Bitcoin ETFs, those backed by firms like BlackRock, Fidelity, Invesco, or Vanguard, collectively accumulated assets of $169 billion, with iShares alone controlling 70% of the market.
Citi analysts acknowledge that the arrival of a "crypto winter is not their central scenario," but they do recognize that it may be influencing investor sentiment to sell. Another factor weighing on the outflow of money from cryptocurrency ETFs is the delay in the U.S. Senate's approval of the Clarity Act for cryptocurrency regulation, following the Republican Administration's approach to making the country the epicenter of these digital currencies. And a third element: U.S. interest rates. As long as they remain high, the appetite for risk assets - such as Bitcoin - diminishes because high-quality bonds and corporate debt still offer attractive returns.