Respond based on risk capacity, portfolio weight, and horizon

Bitcoin has fallen from its peak of $1,26,251.3 on October 6, 2025, to $65,405.5, a decline of 48.2 per cent.

- SANJAY KUMAR SINGH & KARTHIK JEROME

SANJAY KUMAR SINGH & KARTHIK JEROME

Investors must recognise that sharp volatility is inherent to Bitcoin and avoid kneejerk reactions.

Factors behind the fall

Bitcoin’s decline, especially the recent leg from around $80,000 to the mid-$60,000s, reflects a broader global shift towards risk-off sentiment. This has pushed investors away from risk assets, including cryptocurrencies.

United States’ (US) tariff threats remain a key trigger of global uncertainty. Investors’ doubts over the timing and extent of rate cuts in the US added to bearish sentiment. “The nomination of a hawkish Federal Reserve Chair signalled tighter liquidity,” says Abhishek Kumar, Sebi-registered investment adviser and founder, SahajMoney.com. This led to higher bond yields and a stronger US dollar. Geopolitics has also weighed on sentiment.

“US-Iran tensions also pushed capital into gold and the dollar,” says Edul Patel, chief executive officer (CEO), Mudrex.

Spot Bitcoin exchange-traded fund (ETF) flows have also shaped price action. “The fall was amplified by long liquidations in derivatives and sustained outflows from US spot Bitcoin ETFs, which reflected short-term institutional de-risking,” says Ashish Singhal, cofounder, CoinSwitch.