Bitcoin fell sharply on Friday, closing at $80,553, while ether also hit a four-month low, as cryptocurrencies led a sell-off in riskier assets. Analysts warned that dropping below $80,000 could bring even bigger losses for the world’s largest digital currency.The decline comes amid investor concerns about expensive tech stocks and uncertainty over near-term US interest rate decisions. Cryptocurrencies, often seen as a measure of market risk appetite, have reflected weak sentiment in the markets, with AI-focused stocks falling and volatility rising.Bitcoin has lost 12% in the past week, wiping out its gains for the year, and ether is down nearly 19% so far in 2025. The drop comes after a strong rally earlier this year that pushed bitcoin above $120,000 in October, helped by favorable global regulations for crypto. Analysts said the market remains sensitive after last month’s record single-day liquidation of more than $19 billion in positions.“If it’s telling a story about risk sentiment as a whole, then things could start to get really, really ugly, and that’s the concern now,” said Tony Sycamore, market analyst at IG, as quoted by Reuters.The fall also puts pressure on crypto treasury companies, which hold large amounts of bitcoin and other cryptocurrencies on their balance sheets. Standard Chartered said a drop below $90,000 could leave around half of these holdings “underwater,” meaning the assets are worth less than what was paid. Some firms may need to raise funds or sell part of their holdings, which could push prices lower.Listed companies hold about 4% of all bitcoin and 3.1% of ether, according to Standard Chartered.Citi analyst Alex Saunders noted that $80,000 is an important level, around the average price that bitcoin is held at in exchange-traded funds. Market tracker CoinGecko said the total value of all cryptocurrencies has fallen by roughly $1.2 trillion in the last six weeks.Shares of crypto treasury companies have also dropped. Strategy (MSTR.O), the largest firm in this group, has seen its stock fall 61% since July, leaving it down nearly 40% for the year. JP Morgan said Strategy could be removed from some MSCI equity indexes, which could force further selling by funds that track the company. Japanese company Metaplanet (3350.T) has dropped about 80% from its June peak, according to Reuters.Brent Donnelly, president of Spectra Markets, said past bitcoin sell-offs in 2018 and 2022 saw prices fall 75% to 80%. If that happens again, bitcoin could drop as low as $25,000. “I am not saying we are in crypto winter. Just offering a reminder that 75%/80% drawdowns have been part of the game in bitcoin,” he said.
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