Why crypto is getting ‘Trumped’ as Bitcoin price plunges to $60,000, forecasts Bloomberg analyst

Bitcoin tumbled to nearly $60,000 on Friday, extending a 30% drawdown over the past month amid another $2 billion in liquidations.

The top crypto is now down nearly 50% from its peak, erasing gains made after the election of US President Donald Trump, who supports the industry.

Trump’s 2024 election victory and subsequent backing triggered a boom-and-bust cycle, argues Bloomberg Intelligence strategist Mike McGlone.

“Cryptos got Trumped,” he said on Bloomberg Television.

The selloff comes after fresh data on Thursday revealed that the US job market last month was the worst of any January since 2009, when the economy was at the end of the worst crash since the Great Depression. Over 100,000 people were fired.

Key market barometers, including the S&P 500, Nasdaq, and Dow Jones Industrial Average, also sank over 1% on the news.

McGlone has long been one of the most bearish voices on Wall Street.

He predicted Bitcoin would drop to $10,000 amid a market crash resembling the 2008 financial crisis on February 1.

Here’s why analysts say Bitcoin’s plunge may not be over yet.

Competition

Bitcoin differs from assets like gold because it faces competition for investors’ attention from other cryptocurrencies, argues McGlone.

“There was one Bitcoin in 2009, now there’s 28 million,” McGlone said, referring to the millions of so-called altcoins that have sprung up over the years.

Cryptocurrencies can be easily created using code or token-launching platforms, although not all share the same properties.

“The problem is that [memecoin] Shiba Inu is still worth $3 billion. And then there’s Dogecoin still worth $15 billion,” he said.

Macro uncertainty

Trump’s nomination of Kevin Warsh as the next Federal Reserve chair has also spooked crypto and stock investors.

An inside-the-box hawk, Warsh has been critical of the Fed’s loose monetary policy and is seen as aggressively fighting inflation.

That means he’s unlikely to “run it hot” before the midterm elections in 2026, fearing inflation, McGlone said.

Overall liquidity conditions have also tightened, Fabian Dori, chief investment officer at Sygnum Bank, said in an investor note shared with DL News.

Four-year cycle

The crypto market’s traditional four-year boom-and-bust cycle is in effect, Dori argues.

The four-year cycle refers to Bitcoin’s halving event. Every four years, the Bitcoin blockchain cuts the amount of rewards it issues to the network’s miners.

Today, the reward for confirming blocks of transactions is 3.125 Bitcoin. By the middle of 2028, at the next forecast halving, those rewards will drop to approximately 1.56 Bitcoin.

“Concerns around the historical four-year cycle repeating are leading to a certain supply from long-term holders being deployed to the market,” he said.

To be sure, Dori is bullish on crypto in the long term.

He cites fundamentals, growing onchain activity, and stablecoins.

“Looking ahead, the market is near exhaustion, peak fear territory. Expect short-term chop, but the long-term investment case is still fully intact.”