"A 'Crisis of Confidence' in Bitcoin: The Real Reason BTC Plunged 10%"

[The Financial News] Over the past weekend, Bitcoin (BTC) plunged about 10%, breaking below $76,000. Analysts say the recent sharp, consecutive declines in cryptocurrencies (virtual currencies) are due to a powerful rally in semiconductor and other AI stocks, along with a simultaneous surge in gold and silver, which is prompting yield-seeking investors to pull out of the cryptocurrency market en masse.
According to U.S. media reports on the 1st (local time), BTC tumbled about 10% the previous day, falling to the mid-$75,000 range. This sent the price back to levels last seen in April of last year, when then-U.S. President Donald Trump unleashed sweeping tariff hikes on countries around the world, effectively wiping out all of the gains made during Trump’s term.
On the surface, this is being blamed on a series of geopolitical risks: Trump’s latest threats of additional tariff shocks, his push to incorporate Greenland, and rising tensions with the Islamic Republic of Iran.
However, U.S. outlets argue that the real reason is that, buoyed by the AI boom, the semiconductor index has broken above 8,000 and AI stocks are on a tear, while gold and silver have also surged, with gold climbing above $5,000 per ounce (31.1 g) and silver topping $100, repeatedly setting new record highs. As a result, they say, return-hungry investors are pulling large amounts of money out of the Cryptocurrency market.
In fact, as institutional investors have withdrawn heavily from BTC Exchange-Traded Funds (ETF), retail investors have followed suit, pulling out of these ETFs as well. As institutions pull money out of cryptocurrencies, retail investors are questioning BTC and withdrawing their funds too, and U.S. media describe this as "a crisis of confidence in Bitcoin (BTC)."
Of course, over the weekend, after President Donald Trump nominated Kevin Warsh—known as an inflation "hawk"—as the next Chair of the Federal Reserve, both gold and Silver plunged. Silver in particular tumbled about 30%, marking the largest single-day drop on record.
However, with doubts about the independence of the Federal Reserve System (the Fed) and ongoing geopolitical risks unresolved, some observers say gold and Silver are likely to resume their rally going forward.
With AI stocks and gold and Silver all rallying, investors see little reason to keep their assets tied up in cryptocurrencies, whose future remains uncertain. U.S. media therefore conclude that cryptocurrencies have been plunging day after day in recent sessions.
whywani@fnnews.com Hong Chae-wan Reporter