Bitcoin has shed almost $800 billion since its October peak. What’s behind the plunge?

Bitcoin’s price continued to plummet on Friday, marking a significant downturn since hitting its peak in 2025. The cryptocurrency has lost nearly $800 billion in value, wiping out all gains made earlier this year. At its highest point on October 6, bitcoin reached almost $125,000, but has since dropped by about one-third of its value. Currently trading at around $83,509, its lowest level since April, bitcoin is facing its worst monthly performance since 2022.

The recent decline in bitcoin’s price can be attributed to various factors. Wall Street’s concerns about a potential bubble in artificial technology and tech stocks have led to a shift away from riskier assets, including cryptocurrencies. Additionally, uncertainties surrounding the labor market and the Federal Reserve’s upcoming interest rate decision have made investors cautious.

One of the contributing factors to bitcoin’s fall is the correlation between tech stocks and cryptocurrencies. When tech stocks experience turbulence, bitcoin tends to follow suit. Furthermore, some investors may be selling their bitcoin to cover margin calls, particularly as platforms like Coinbase offer leveraged trading options, such as perpetual futures. Leveraged positions can lead to forced selling when prices drop, exacerbating the downward pressure on bitcoin’s price.

Despite the recent decline, experts remain optimistic about bitcoin’s long-term prospects. Historically, the cryptocurrency has experienced several corrections during bull markets, with price drops of 20-30% not uncommon. Some investors may view the current situation as a buying opportunity, as lower prices could present a chance to accumulate bitcoin at a discounted rate.

In conclusion, while the recent drop in bitcoin’s price may be concerning to some investors, it is important to remember that the cryptocurrency has a history of rebounding from large declines. The market remains volatile, but for those with a long-term perspective, bitcoin’s current price levels may present an opportunity for growth.

This article was edited by Aimee Picchi and contributions were made by The Associated Press. For more news and updates, you can visit the CBS News website.