Why Has the Price of Bitcoin Plummeted? Experts Explain
By Max Zahn, ABC News | February 2, 2026
The price of Bitcoin, the world’s most popular cryptocurrency, has fallen by roughly 10% over the past week, sparking concern among investors and analysts. This decline extends a broader selloff in the crypto market, as Ethereum—the second-largest cryptocurrency—has plunged nearly 20%, and Solana’s value has been cut in half during the same period.
Momentum Selloff Amid Geopolitical and Economic Uncertainty
Experts interviewed by ABC News attribute this sharp downturn to growing geopolitical tensions and economic uncertainties. Such conditions have caused risk-averse investors to offload their crypto holdings, creating a fast-moving domino effect in the market.
“There are concerns about risk right now,” explained Bryan Armour, director of passive strategies research at Morningstar. “The price of crypto tends to drop when investors look to take risk off the table. That may have precipitated the decline, and then it was like a snowball rolling downhill.”
He noted that the initial drop likely triggered forced liquidations among leveraged buyers—investors who borrow money to buy crypto—thereby intensifying the downward pressure on prices.
Economic Factors and Global Conflicts Fueling Nervousness
Recent economic indicators underscore the cautious sentiment among investors. The U.S. labor market has slowed over recent months, and inflation rates remain above the Federal Reserve’s 2% target. Alongside these economic concerns, geopolitical conflicts continue to escalate. Negotiations over Greenland, disputes over U.S.-backed leadership in Venezuela, the ongoing Russia-Ukraine war, and rising U.S. threats toward Iran collectively contribute to market unease.
Adding to the tension are President Trump’s recent threats to impose tariffs on Canada, South Korea, and several European countries as leverage in foreign policy discussions—factors further unnerving global markets.
“Everything that’s been happening the last few weeks is definitely adding a lot of nervousness in the market,” said Christian Catalini, founder of the MIT Cryptoeconomics Lab. “Anything that makes investors risk averse of course affects the price of Bitcoin.”
Prolonged Downtrend Intensifies Bitcoin’s Challenges
This recent dip builds on a months-long decline. As of early February 2026, Bitcoin is approximately 40% below the peak it reached in October 2025. In contrast, the S&P 500 index rose 5% and gold increased by 17% during the same period, highlighting Bitcoin’s relative vulnerability.
Jim Reid, research strategist at Deutsche Bank, noted in a memo to clients that Bitcoin has fallen for four consecutive months—a streak not seen since the pandemic period.
Market Experts Offer Perspective on Bitcoin’s Volatility
While some investors appear rattled by Bitcoin’s recent slide, analysts were not caught off guard. After surging nearly 40% in late 2024 following President Trump’s election and his supportive remarks about cryptocurrency, the market had reached what some consider a natural peak.
“There’s a natural limit to how high it can go up,” Steve Sosnick, chief strategist at Interactive Brokers, told ABC News.
Bitcoin has long been known for its volatility since its inception around 15 years ago. It endured a significant downturn in 2022, losing over 60% of its value, and experienced similar dramatic fluctuations during prior years, often driven by external shocks like the pandemic.
Despite these fluctuations, Bitcoin maintains a strong long-term growth trajectory. Over the past five years, its price has surged approximately 96%, outperforming the S&P 500’s 80% gain over the same timeframe.
What’s Next for Bitcoin?
Bitcoin’s price did see a slight uptick on Monday following recent losses, but experts caution that volatility will likely remain a defining feature of the crypto market.
“The volatility of crypto makes it nearly impossible to predict where the price will go next,” Armour said. “The only certainty may be more volatility.”
The rise of Bitcoin exchange-traded funds (ETFs) in the last two years has brought cryptocurrency into more traditional financial portfolios, allowing investors to gain exposure without directly holding the asset. Yet, even with broader participation, digital assets continue to experience sharp price swings.
Armour advises investors to approach Bitcoin with caution: “The best thing investors can do if they do want to get involved in Bitcoin is to know their limitations. They shouldn’t have high confidence in any one outcome.”
For continuing updates on Bitcoin and other cryptocurrencies, stay tuned to ABC News.
This article was originally published by ABC News.