Macroeconomic Pressures and Legislative Slowdown Drive Decline in Price of Bitcoin

Macroeconomic pressures and a lack of progress in regulation are among the factors that led to the recent decline in the price of Bitcoin, CoinDesk reported Monday (Nov. 24), citing analysts from Deutsche Bank.

Bitcoin ended last week with a Nov. 21 price of about $80,000, which was about 35% lower than the peak it reached in early October, according to the report. At the time CoinBase posted its report, the price was about $86,000.

Last week’s drop was driven by several factors, including investor caution, expectations that interests rates will remain higher despite a recent rate cut, a slowdown in progress toward regulation in the form of the CLARITY Act, a decline in institutional inflows and profit-taking from long-term holders Bitcoin, according to the report.

Bitcoin’s drop came at a time when stocks also fell because of fiscal concerns in the United States, tensions between the U.S. and China, and high artificial intelligence (AI) valuations, the report said.

Deutsche Bank analysts said, per the report, that Bitcoin’s long-term prospects remain intact and that regulatory clarity and greater adoption of the cryptocurrency by institutions could support it in the future.

PYMNTS reported Monday that observers are wondering whether the fall of the price of Bitcoin is a health consolidation or whether it marks “peak Bitcoin” for this cycle.

The report said that while the price of Bitcoin has seen drawdowns that were larger in percentage terms in the past, the current decline feels more consequential because the cryptocurrency is now embedded in balance sheets, exchange-traded fund (ETF) products and policy debates.

It was reported Tuesday (Nov. 18), when the price of Bitcoin had fallen to $89,000, that the cryptocurrency’s gains year to date had been wiped out despite earlier progress toward institutional adoption and regulation.

That report said factors contributing to the decline included investors’ concerns about interest rates, the steep valuations of tech companies involved in the AI boom, and a surprise tariff announcement in October that led to historic levels of liquidation across the crypto market.

It was reported on Oct. 22 that the government shutdown that was happening at the time had delayed potential policy changes, including bills having to do with the regulation of crypto markets.