Crypto Crash or Macro Blip? Experts Break Down What’s Really Happening
In 2025, the crypto market experienced a sharp downturn, wiping out over $1.2 trillion in value, with Bitcoin falling from $120,000 to around $80,000. Experts say this drop, driven by shifts in expectations around Federal Reserve rate cuts and resulting liquidity changes, is less catastrophic than past crashes. Bitcoin’s price is highly sensitive to liquidity and sentiment, but this time, investors exited crypto entirely rather than shifting to other crypto assets, showing a stronger connection between crypto and broader financial markets. Institutional investors now play a larger role, slowing market reactions and making this correction more measured compared to past episodes marked by rapid liquidations. The downturn is also attributed to a lack of a compelling market narrative, making crypto more vulnerable to broader tech-market and macroeconomic trends. Analysts argue that such corrections help reduce excess leverage and reflect the market’s growing maturity.
