Bitcoin (BTC-USD) sank 2% to hover near $66,000 on Monday after touching a three-week low overnight as the broader market sank over global trade uncertainty.
The decline followed the Supreme Court’s decision to strike down President Trump’s tariffs. The president later announced a 10% blanket global tariff, which was subsequently raised to 15%, adding to investor unease.
Bespoke Investment Group said in a research note that “investors are starting to question whether [bitcoin is] even an effective store of value anymore.”
Bitcoin is now down 24% this year and remains roughly 47% below its October all-time high. The token is on pace for its fifth month of losses.
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Monday’s weakness was a reminder that the so-called “crypto winter” isn’t over, though analysts don’t expect it to be as severe as other past cycles.
“Despite the latest deleveraging, we’ve yet to see a significant number of insolvencies among crypto lenders or prime brokers,” Compass Point analyst Ed Engel wrote Monday.
In contrast, the 2022 downturn was marked by widespread lender and trading firm collapses that triggered forced selling and helped drive bitcoin down 77% from its peak.
The largest failure so far this year has been Blockfills, a midsize prime broker that halted deposits and withdrawals earlier this month amid the decline in bitcoin prices.
While notable, Engel said Blockfills was far smaller than some of its peers, and the broader market has not seen the kind of domino effect that defined the last crypto winter.
“Without similar credit contagion this cycle, we don’t believe the current bear market will be as severe as last cycle,” Engle added.
Still, even the most bullish analysts have noted the token could drop toward the $50,000 level before rallying in the second half of this year.
Earlier this month, Standard Chartered analyst Geoff Kendrick cut his year-end price target to $100,000 from $150,000.
Kendrick noted that the market currently expects no further Federal Reserve rate cuts until Kevin Warsh takes over as chair in June.
“Against this backdrop, we think ETF holders are more likely to sell rather than buy the dip, for now,” he said.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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