Bitcoin plunged below $80,000 on Friday, deepening a market rout that has erased more than a quarter of its value from recent record highs.
The cryptocurrency had peaked at approximately $109,000 when Donald Trump was sworn in as US president in January.
Investors had anticipated that Trump’s policies would boost Bitcoin’s value even further following his election victory in November.
Instead, the token has suffered a dramatic reversal of fortune in recent weeks.
The sell-off intensified on Friday morning as traders continued to abandon positions in what analysts described as a wider cryptocurrency market downturn.
The dramatic decline appears to be driven by disappointment over President Trump’s perceived inaction on his pro-crypto campaign promises.
Experts point to a notable lack of progress on Trump’s pre-inauguration pledge to create a state-run strategic reserve of Bitcoin.
This commitment had generated significant enthusiasm among cryptocurrency investors.
“We think that a lot of money went into crypto on the hope that Donald Trump would institutionalise crypto when he got to office,” said Kathleen Brooks, an analyst at finance firm XTB.
The silence from the White House on cryptocurrency policy has left many investors questioning their positions.
“However, comments about crypto since Mr Trump took over the presidency have been conspicuous by their absence. This could be why investors are flooding to the exits,” Brooks added.
Trump had previously declared his intention to make the United States the world’s “crypto capital”.
Bitcoin’s value remains significantly above levels seen this time last year, when its price was around $60,000 (£48,000).
The slump has been exacerbated by Trump’s decision to launch his own “meme coin” last month.
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The “meme coin”, called Trump, has plunged about 85 per cent in value since a brief early spike.
When launching it, Trump admitted: “I don’t know much about it other than I launched it, other than it was very successful.”
The move prompted widespread backlash even from within the crypto industry.
David Morrison, an analyst at finance services firm Trade Nation, said the crypto sector is “suffering a bit of a meltdown”.
Investors had anticipated that Trump’s policies would boost Bitcoin’s value even further following his election victory in November
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“It has certainly unwound most of Bitcoin’s gains following Trump’s election win in November, when a much friendlier regulatory environment was promised.”
Despite the recent downturn, Bitcoin’s current valuation remains substantially higher than the $60,000 level recorded at this point last year.
However, the cryptocurrency market continues to experience significant volatility.
The rapid decline from January’s peak has erased most gains made following Trump’s election victory.
