Bloomberg analyst warns that the "Trump Effect" is backfiring on the crypto market; Bitcoin drops below $60,000 and may not have bottomed out yet
February 6 News: Bitcoin prices briefly dropped close to $60,000 this Friday, with the total decline over the past month expanding to approximately 30%, accompanied by over $2 billion in forced liquidations. Based on the all-time high, the current price has fallen nearly 50%, almost erasing all gains since Donald Trump was elected President of the United States.
Bloomberg industry research strategist Mike McGlone openly stated on the program that cryptocurrencies are experiencing a backlash from the “Trump effect.” He believes that Trump’s victory in 2024 and his public support for the crypto industry triggered a rapid influx of speculative funds, which also accelerated the subsequent bubble burst. “This is a classic boom-and-bust cycle,” McGlone said.
The current sell-off is also related to weakening U.S. macroeconomic data. The latest employment report shows that the U.S. added the fewest jobs since 2009 last month, with over 100,000 people unemployed, and major stock indices declining in tandem. Market risk appetite has rapidly cooled, with digital assets bearing the brunt.
On a structural level, McGlone pointed out that Bitcoin faces attention competition from a large number of altcoins. Unlike gold, Bitcoin is not the only choice, as tens of millions of tokens continuously divert funds. For example, Shiba Inu still has a market cap of several billion dollars, and Dogecoin is even larger, which has intensified selling pressure during the bear market.
Macroeconomic policy uncertainty has also amplified volatility. News that Trump nominated Kevin Warsh as the next Federal Reserve Chair sparked market concerns over a hawkish stance. Fabian Dori, Chief Investment Officer at Sygnum Bank, also noted that the global liquidity environment is tightening, putting pressure on risk assets.
Additionally, Dori mentioned that the four-year cycle effect brought by Bitcoin halving is taking effect, with some long-term holders beginning to realize profits. However, he maintains a long-term bullish outlook, believing that after panic is released, the crypto market will gradually recover.
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