Bitcoin dropped to about $60,000 on February 5, falling more than 50% from its October highs. A new market commentary from Grayscale suggests the crash wasn’t caused by anything specific to crypto. Instead, it followed the same pattern as a broader sell-off in high-growth tech stocks.
Grayscale’s data shows Bitcoin has been closely tracking U.S. software stocks with high valuations for at least 12 months.
The two moved almost identically during the latest downturn, which points to investors pulling back from risk assets across the board.
Grayscale’s take is direct: “We believe it’s both.”
The firm acknowledged that Bitcoin shares key traits with gold, including supply scarcity and independence from governments. But gold has been used as money for thousands of years. Bitcoin is 17 years old.
If Bitcoin succeeds long-term as a monetary asset, Grayscale expects its price to “eventually look more like gold than growth stocks, with lower volatility, a lower correlation to equity markets, and lower expected returns.”
The selling pressure came from American investors. Bitcoin on Coinbase traded well below the price on Binance around the recent lows, a sign that U.S.-based traders were offloading. Spot Bitcoin ETPs also saw around $318 million in net outflows since early February.
Long-term holders told a different story. Grayscale found no new liquidations from Bitcoin “OG Whales” based on on-chain data.
Also Read: Crypto Analyst Warns Bitcoin Could Hit Zero, Lays Out 16-Step ‘Doomsday’ Scenario
Bitcoin’s drawdown looked mild compared to altcoins. AI-related crypto tokens dropped 71% month to date. Utilities and services fell 69%. Consumer and culture tokens lost 66%. Smart contract platforms came down 58%.
Looking ahead, Grayscale pointed to three areas gaining traction: privacy, perpetual futures, and prediction markets. The firm named ETH, SOL, and LINK as likely beneficiaries of growing stablecoin and tokenized asset adoption. ZEC was highlighted for privacy, and HYPE for its expansion into prediction markets.
The near-term factor to watch is the CLARITY Act. Delays in the Senate have weighed on crypto valuations, and the White House recently convened a second meeting with industry leaders to push the bill forward.
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