Bitcoin skids as investor sentiment droops

Technology / news

Crypto currencies are going soft at the moment, contrary to expectations

28th Feb 25, 11:24am by Juha Saarinen

The OG crypto currency Bitcoin is dropping in perceived value, having gone from over US$105,000 a unit to around US$83,456 as of writing.

Why exactly that is happening is anyone's guess. Trump's tariffs, United States' consumer confidence dipping the most since 2021, big outflows in Bitcoin-backed exchange traded funds, or Argentinian president Javier Milei's alleged LIBRA memecoin rug pull might indeed have spooked speculators. Other crypto currencies are also drooping.

A huge recent hack of US$1.4 billion in the Ethereum crypto currency at the Bybit exchange, most likely by North Korea's infamous Lazarus Group, can't be helpful either. Bybit co-founder Ben Zhou announced the exchange has produced an incident report on the hack, saying it wasn't their fault but a compromised Safe.global developer whose computer was compromised:

Bybit Hack Forensics Report
As promised, here are the preliminary reports of the hack conducted by @sygnia_labs and @Verichains
Screenshotted the conclusion and here is the link to the full report: https://t.co/3hcqkXLN5U pic.twitter.com/tlZK2B3jIW
— Ben Zhou (@benbybit) February 26, 2025

Maybe there's some rationality to it all, maybe not, but there's a curious gadget from Alternative.me that tries to measure bearish and bullish crypto sentiment, the Bitcoin Fear and Greed Index (BFGI). It's a simple device that goes from 0 to 100. Right now, things are looking downbeat on the Bitcoin front, contrary to expectations of a crypto-friendly Trump administration coming in:

Latest Crypto Fear & Greed Index

Whether or not the BFGI is worth paying attention to is another issue, but Alternative.me is no doubt correct in saying that the crypto market is driven by emotion. So's much of our economy in fact. Look at Nvidia, the chip maker powering artificial intelligence (AI) worldwide. The company put in better than expected results, indicating AI is still hot stuff with loadsamoney being sunk into the tech.

However, the results weren't as insanely good as investors wanted them to be, and now Nvidia which is a whale-sized player on the share market, is sinking hard and fast.

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52 Comments

by J.C. | 28th Feb 25, 12:39pm 1740699577

The OG crypto currency Bitcoin is dropping in perceived value, having gone from over US$105,000 a unit to around US$83,456 as of writing.

Let's give it some perspective. Down approx 20%. Based on previous cycles, this is nothing and should be expected. If ratty doesn't fall 30-35% in a bull market or upwards cycle, then it's potentially an indicator that the market is maturing. During the 2016-17 bull run, the BTC price fell 6x at magnitudes of 30%+. So realistically we should get to somewhere between $70-$75K before things calm down. This is how free markets should work.

And the real damage is happening further out the risk curve where all the degens congregate and are positioning themselves for the 100x moonshots that they're using leverage to amplify their potential gains. Teens, university students, incels. In some ways, they're behaving rationally. The boomers won't get it, but the boomers themselves are responsible for creating the dystopic environ these people live in.

by The Person | 28th Feb 25, 12:43pm 1740699784

> This is how free markets should work.

So as we haven't had six occasions this year where the cost of 2L of blue dropped 30%, that means the milk market is not a free market and the supermarket duopoly are scamming us?

by J.C. | 28th Feb 25, 12:48pm 1740700102

Most FMCG companies are woefully under-skilled in how to set prices accordingly - elasticity, etc. Most commercial people wouldn't even know where to start to know to measure the optimal price points. This is the type of stuff that should be taught in business schools.

by alphabeatrium | 28th Feb 25, 12:54pm 1740700488

We have an effective monopsony in Fonterra for a good with limited substitutes (no one wants almond milk). Why would you expect price instability for milk?

by The Person | 28th Feb 25, 3:39pm 1740710395

there are dozens of suppliers, it's a commodity, and according to JC, in a free market prices should dive 30% approx six times a year.

by LASSET | 28th Feb 25, 12:25pm 1740698756

Bitcoin must be the only asset class where long term investors (like myself) are actually happy to see decent price drops. I just brought a reasonable amount overnight. When you are certain this is a minimum 19T asset class in the future, this is just an opportunity to accumulate. I believe you shouldnt be buying BTC unless you have a minimum 8 year horizon (2 halvings). Dont worry about noise like this.

The old sharemarket adage of "buy when there is blood in the streets" is very applicable here. When you see the Fear and Greed Index at these levels that is always a good time to load up. To be honest this isn't even that significant a pullback for mid bull market. From the high of $109k to the current low of $82k that only a 25% drop. Previous bull markets have seen multiple 30%+ drops on the way up. This is no big deal, I used to see my portfolio drop 25% in a day.

by J.C. | 28th Feb 25, 12:43pm 1740699797

Bitcoin must be the only asset class where long term investors (like myself) are actually happy to see decent price drops.

I share the same sentiment Lassie. Why do people only want to buy assets when the price is ascending not when prices are in the toilet?

People are happy to buy when ratty goes over 100K but would be paralysed by fear if it went under 10K.

by Cheetahlegs66 | 28th Feb 25, 3:16pm 1740709000

That is counter cyclical investing. In shares it’s a challenge to identify the lows, hence the dollar cost average approach.

However, I don’t consider BC an investment, more a speculative asset. Recommendations to buy on the low are akin to Dutch tulip mania when the market collapsed and someone shouted ‘I’ll take the lot for 5 guilders’ and the next day regretted the purchase.

by linklater01 | 1st Mar 25, 11:45am 1740782713

Lasset,

Not so. Warren Buffett's mantra has long been 'Be fearful when others are greedy and be greedy when others are fearful'. In other words, he operates on a contra-cyclical basis. He buys shares when they are out of favour and I have tried to follow a similar route, though with only a very small fraction of his ability.

by Squishy | 28th Feb 25, 12:55pm 1740700549

Where are the "bitcoin is a hedge, like gold" people now?

by Zwifter | 28th Feb 25, 1:13pm 1740701607

Squished.

by Baywatch | 28th Feb 25, 1:17pm 1740701854

Price of Bitcoin same time last year ..$62K...your comment squished

by J.C. | 28th Feb 25, 1:28pm 1740702503

Price of Bitcoin same time last year ..$62K...your comment squished

Gold price up 42% in USD compared to same time last year. In Aotearoa pesos, closer to a whopping 50%.

by LASSET | 28th Feb 25, 1:17pm 1740701870

We are busy right now exchanging as much NZD as we can spare for BTC.

by Juha Saarinen | 28th Feb 25, 1:42pm 1740703321

Maybe check extra carefully which exchange to use for that?

by LASSET | 28th Feb 25, 2:00pm 1740704405

Yes, your first step is someone reputable who has been around for some time. But after that, from my experience using many of them, currency conversion and purchase fees are the biggest factor to consider (Obviously depends on how large an amount we are talking about). The most important thing is to withdraw to self custody quickly. DO NOT treat an exchange like a bank, because it most certainly is not. You should NEVER keep any bitcoin on ANY exchange that you are not actively trading with. For the vast majority of people, just buy the ETFs through your normal share trading account.

by AN Other | 28th Feb 25, 2:06pm 1740704793

Hoping that, like a real hedge, this is a serious bit of pruning that results in decent regrowth in the near term.

by rastus1 | 28th Feb 25, 1:40pm 1740703254

Just wait until these 'investors' require some cash due to the downturn. Everything will drop, including gold initially as the need for cash becomes desperate.

The digital imaginary friends have never been tested.

Poof.

by J.C. | 28th Feb 25, 1:48pm 1740703693

Just wait until these 'investors' require some cash due to the downturn. Everything will drop, including gold initially as the need for cash becomes desperate.

I think that the OGs understand well that BTC can plummet in price in SHTF scenario. We've already seen it in 2020.

As for gold, 100% that it will fall in similar scenario. Big difference now though is central banks are hoarding gold (doesn't make any sense to Lord Orr who thinks gold is for plonkers).

by Zachary Smith | 28th Feb 25, 2:25pm 1740705957

Did you change your mind about how great it would be if BTC dropped to below $4,000 again?

by mark_a | 28th Feb 25, 2:58pm 1740707909

I'm in at $2k!!!!!!!

by J.C. | 28th Feb 25, 3:09pm 1740708596

Would be fantastic Z. Like winning the jackpot.

by LASSET | 28th Feb 25, 4:31pm 1740713516

Because Zachary doesn't understand Bitcoin (and hasn't tried), he also doesnt understand how much conviction a bitcoiner who has been through at least two full cycles has. There is nothing financial related that I'm more certain about. Helped by the fact I'm equally certain that governments will continue to devalue fiat currency until it collapses.

As the most robustly and transparently provable scarce asset in existance, Bitcoin will continue to appreciate against EVERYTHING until after I'm long gone. I know that for those who don't follow this space it sounds like hyperbole, but a genuinely new asset class appears only once or twice a lifetime. Not only that but this is the first time in human history where the everyday citizen has been able to front run companies, banks and countries. Do you really want to have lived through this time period and not taken the opportunity that was presented?

Owing 1 Bitcoin is already out of reach for anyone but the 1%. Even 100 million satoshis (0.1 BTC) is now beyond all but the very wealthy. Very soon owing just 1 million Satoshis (0.01 BTC) will be the same.

by agnostium | 28th Feb 25, 4:53pm 1740714818

Owing 1 Bitcoin is already out of reach for anyone but the 1%. Even 100 million satoshis (0.1 BTC) is now beyond all but the very wealthy. Very soon owing just 1 million Satoshis (0.01 BTC) will be the same.

That is actually an argument for it being worthless in the long run. I'm not saying it will be mind.

by Zachary Smith | 28th Feb 25, 5:39pm 1740717567

An interesting response to my question. Rather too defensive!

I think JC had made the claim about BTC dropping below 4K being a wonderful thing in a comment above however it was subsequently edited out. I was curious if he did genuinely think that. It is the sort of claim that many might find frightening. Like it's a perpetual Ponzi machine.

by J.C. | 28th Feb 25, 6:37pm 1740721073

It is the sort of claim that many might find frightening. Like it's a perpetual Ponzi machine.

On the contrary Z. BTC is not centralized so it's essentially the antithesis of Ponzi.

by Juha Saarinen | 28th Feb 25, 8:30pm 1740727855

In theory not centralised, In practice however.

by J.C. | 28th Feb 25, 9:30pm 1740731410

In theory not centralised, In practice however.

Depends what you mean by centralized. The fact that the supply and monetary policy is not determined by an authority, but by code, is decentralization to the core.

by Juha Saarinen | 28th Feb 25, 9:48pm 1740732506

I don't think that's a straight up response and I'm fairly sure you know that.

by J.C. | 28th Feb 25, 10:24pm 1740734666

I don't think that's a straight up response and I'm fairly sure you know that.

Well I can outline it for you:

1. Network Structure--spread across numerous network nodes worldwide, creating redundancy and maintaining data integrity

2. Decision-Making--changes to the network require consensus among participants rather than being dictated by a central authority

3. Transparency and Security--a decentralized structure makes it extremely challenging for any single party to alter transaction records or manipulate the system

4. Independence from central banks--no central authority can manipulate supply or monetary policy

by the Joneses | 28th Feb 25, 10:00pm 1740733214

The code is often updated and changed though, and stored in a central repository. There are people who are allowed to make and approve changes, and there are others who vote/approve whether the servers get upgraded to a new version or not. The decentralization is only regarding the ledger being duplicated. The decentralisation just means it is harder to kill by malicious actors. Not that there isn't a handful of people who actually control/run it all.

by J.C. | 28th Feb 25, 10:26pm 1740734782

The governance model makes it very difficult to implement significant changes to the core protocol. Any modification to the monetary policy would require:

Developers proposing and writing code for the change
Widespread community agreement on the proposal
Majority of nodes adopting the new rules

by HistoryRepeats | 28th Feb 25, 5:30pm 1740717059

Always been sceptical about crypto. Anyone who buys crypto as an "investment" doesn't have a clue what an investment is. Crypto is pure speculation (and its extreme volatility makes it useless as a currency).

But I figured you have to "be in to win", much like Lotto, so I gave it a crack anyway. In 2017 I bought NZ$500 worth of BTC and NZ$500 ETH. In 2020 and 2021 I bought another $19k of crypto.

Then last year I used about $17k of my crypto to buy gold.

So currently I have about $3k of my initial stake left in crypto. Not long ago my crypto holdings (hodlings?!) had a market value of $80k, but after the latest correction it's about $60k.

Who knows what crypto will do - it may turn to complete crap, or it may continue to show average annual gains, like property markets and share markets.

Either way, I don't really care!

by J.C. | 28th Feb 25, 5:07pm 1740715646

Not long ago my crypto holdings (hodlings?!) had a market value of $80k, but after the latest correction it's about $60k.

I reckon that among Aotearoans, that could make you a 1%er in the crypto space. I could be wrong but I wouldn't be surprised if I'm right.

by ChrisOfNoFame | 28th Feb 25, 4:21pm 1740712894

Will the 'skids' continue?

I expect they will.

The only value of Bitcoin, as it always has been, is to bypass 'the man'.

I.e. only fools hold longer than the 30 seconds it takes to effect a trade.

by J.C. | 28th Feb 25, 5:38pm 1740717530

Water cooler bro thinking to himself when BTC is at 100K+: "Why didn't my advisor let me know about this"

Water cooler bro thinking to himself when BTC is at <80K: "Heh. Glad I didn't buy any of that crap"

by the Joneses | 28th Feb 25, 10:14pm 1740734074

Bitcoin exists solely to take value from other investors. It is a net negative game, and everyone thinks they will be the ones who beat the game.

The amount each one costs at any time is irrelevant as only the increase/decrease over time matters to investors.

There is no way to inherently value it, because it is simply a digital asset like a counterstrike weapon skin. It is only scarce in the fact that you cant create another official counterstrike skin server that other people will accept is the 'real' or 'original' one. Though at least with a skin, you get to look at it, so there is some utility.

by Zachary Smith | 1st Mar 25, 6:38am 1740764303

Water cooler bro thinking to himself when BTC is at 100K+: "Why didn't my advisor let me know about this"

Water cooler bro thinking to himself when BTC is at <80K: "Heh. Glad I didn't buy any of that crap"

This makes sense. It should be the other way around is perhaps what you are suggesting. And why is that? Because, as The Joneses writes above, Bitcoin exists solely to take value from other investors.

by J.C. | 28th Feb 25, 5:45pm 1740717909

by streetwise | 28th Feb 25, 6:38pm 1740721107

Well, well, well......my, my, my,.......I've been aound the flower shops this afternoon but they're all out of tulips......you've got to be quick.....oh well it'll be dollars and cents when I head down to the supermarket this evening.

by LASSET | 28th Feb 25, 6:55pm 1740722146

It really is quite hilarious how people who have continued to not invest in the best performing asset in history, get all excited when it pulls back a little. "Phew! I'm glad I didnt invest in that shit! Bitcoin just dropped from $109 THOUSAND to $79 THOUSAND USD."

6 months ago it was $50k.

2 years ago it was $19k.

5 years ago it was $6k.

10 years ago it was $250!

If this site still exists in another decade, some of these commentators will be cheering on when it drops from $1M to $800,000. Without a trace of self awareness.

by Brocky | 28th Feb 25, 6:59pm 1740722369

They will still be fapping over the NZX and by how many pips the bank has adjusted their mortgage.

by J.C. | 28th Feb 25, 7:20pm 1740723651

Bitcoin just dropped from $109 THOUSAND to $79 THOUSAND USD."

Well hang on there for a minute. Try to put yourself in normie shoes.

Measured in Aotearoa pesos, BTC is currently at 141K. And its high was around 187K.

So that's almost 50K that's vanished into thin air! Just this year!

Is it any surprise people are getting excited about this?

by Zachary Smith | 28th Feb 25, 7:32pm 1740724379

Do BTC purists rely on normies entering the market for a dabble and then giving up and selling low when the price tanks? The hardcore embrace wild fluctuations as being the engine of BTC and are eager for this to happen. On a global scale it generates quite a bit of churn. Or do I have that completely wrong? Will Blackrock buy back into BTC at some stage?

by J.C. | 28th Feb 25, 7:49pm 1740725374

Do BTC purists rely on normies entering the market for a dabble and then giving up and selling low when the price tanks?

Perception Z. 50K sounds like a lot moolah. But if ratty moved from $10K to $7

by mark_a | 28th Feb 25, 7:33pm 1740724406

And the momentum of it - in this case DOWN VVVVVVVVV.

Next week it could go the other direction……..

Not an investment so much as a dice roll.

So its 5% of your portfolio not 50% - unless you are a baller!

by Baywatch | 1st Mar 25, 7:32am 1740767530

Agree...14 years and we are still.going on about tulips?

by 21Trillion | 28th Feb 25, 7:59pm 1740725985

Interest.co.nz once again only reporting on Bitcoin when it's a negative spin.

They even put up an announcement banner lol.

by HistoryRepeats | 28th Feb 25, 8:24pm 1740727459

What's the bet it'll be an article by DC blaming Trump and Musk?

by Zachary Smith | 28th Feb 25, 8:42pm 1740728542

I've got the BTC ticker up on one of my screens. Briefly hit 78K just now.

by Zachary Smith | 1st Mar 25, 7:15am 1740766543

Just watching a few BTC videos. Some are saying that the drop was expected. I don't recall the Bitcoin Bros advising to not buy but that should have been the call at 100K. One should only buy after a significant drop for a good chance to make money from other people's fear and let the cycle start again.

by J.C. | 1st Mar 25, 1:25pm 1740788729

I don't recall the Bitcoin Bros advising to not buy but that should have been the call at 100K.

I don't think the BTC bros are a collective Z. Some are into the tribalism aspect for various reasons; some aren't.

Fundamentally, there's no reason to advise anyone. People need to make their own decisions as to what represents a fair price. That's how markets should work and the buyer's reasons for owning BTC. Regardless, buying BTC when the price has retraced tends to be seen as a good thing.