Bitcoin Plunges Over 5% Amid Worst Month Since FTX Collapse

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Bitcoin endured one of its most challenging months in recent history, dropping over 16% in April 2025 — its steepest decline since the collapse of FTX in November 2022. At one point on April 29, the leading cryptocurrency fell more than 5% in a single day, briefly slipping below the critical $60,000 mark and dragging down the broader digital asset market with it.

This sharp downturn marks a dramatic reversal from the bullish momentum seen earlier in the year, when enthusiasm around U.S.-listed spot Bitcoin ETFs propelled prices toward an all-time high near $74,000. Now, as investor sentiment cools and macroeconomic headwinds intensify, the market is grappling with reduced inflows, weak post-halving performance, and underwhelming global ETF launches.

Market Sentiment Shifts After ETF Euphoria

The initial excitement surrounding the January 2025 approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC) led to massive capital inflows. In March alone, 11 approved U.S. Bitcoin ETFs recorded a net inflow of $4.6 billion, signaling strong institutional demand.

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However, that momentum has reversed sharply. By April 29, these same ETFs reported a cumulative monthly net outflow of $182 million, reflecting waning retail and institutional appetite. Analysts attribute this shift to fading expectations of near-term Federal Reserve rate cuts, which have historically supported risk-on assets like cryptocurrencies.

Seth Ginns, Managing Partner and Head of Liquid Investments at Coinfund, noted that while ETFs opened a new gateway for mainstream investors, their impact may have already peaked.

“The ETFs created a brand-new avenue for participation — one that exceeded everyone’s expectations in terms of adoption speed,” Ginns said. “That helped drive prices higher faster than anticipated. But now we’re seeing a natural cooling-off period.”

Bitcoin Halving Fails to Spark Rally

April 19 marked the much-anticipated Bitcoin halving event, a quadrennial occurrence that reduces block rewards for miners from 6.25 to 3.125 BTC. Historically, such events have preceded major bull runs due to constrained supply growth.

Yet this time, the market response was muted. Despite the fundamental shift in issuance dynamics, prices failed to rally — suggesting that existing supply constraints were already priced in or overshadowed by macro concerns.

While the halving does not affect transaction throughput or network efficiency, it significantly impacts miner economics. With reduced rewards and rising operational costs, some smaller mining operations face margin pressure, potentially influencing future network security and hash rate distribution.

Mining Stocks Hit Harder Than Bitcoin

Unsurprisingly, mining equities have borne the brunt of the downturn. As Bitcoin’s price slid, so did the valuations of publicly traded mining firms — and by a wider margin.

These stocks are highly leveraged to Bitcoin’s price movements and sensitive to changes in mining difficulty and energy costs. The current environment — marked by lower BTC prices and halved block rewards — has intensified investor concerns about profitability.

Meanwhile, MicroStrategy Inc., which has long championed Bitcoin as a corporate treasury asset, saw its shares plunge 18%. The company reported a $53 million first-quarter loss despite Bitcoin’s earlier rally, having taken an impairment charge on its Bitcoin holdings due to declining valuations.

Hong Kong ETF Launch Fails to Ignite Demand

Market watchers had hoped Asian markets might provide fresh momentum, particularly with the debut of spot Bitcoin and Ethereum ETFs in Hong Kong.

However, the launch on April 29 failed to meet expectations. Six newly listed Bitcoin ETFs collectively recorded just **$11 million in trading volume on their first day**, a stark contrast to the $4.6 billion traded when U.S. spot Bitcoin ETFs launched.

Vetle Lunde, analyst at K33 Research, attributed the tepid response to overly optimistic pre-launch speculation:

“There was an irrational level of anticipation ahead of the Hong Kong ETF launch. The reality check came quickly once trading began.”

Ethereum also struggled, falling nearly 18% in April — its worst monthly performance since June 2022. The decline follows increased regulatory scrutiny from the SEC, which requested information from multiple firms regarding Ethereum-related products in March.

Adding fuel to the fire, ConsenSys — developer of the MetaMask wallet — filed a lawsuit challenging the SEC’s authority to regulate Ethereum as a security. This legal clash underscores the ongoing tension between crypto innovators and regulators, creating uncertainty for Ethereum-based projects and investors alike.

Altcoins and Memecoins Suffer Disproportionate Losses

During market downturns, altcoins and memecoins typically experience amplified volatility compared to Bitcoin. April was no exception.

Smaller-cap digital assets like Dogecoin and Polkadot saw steeper declines than Bitcoin on April 29, reflecting risk-off behavior among traders. These tokens often outperform during bull markets but lack fundamental underpinnings, making them vulnerable during corrections.

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Market analysts warn that without renewed catalysts — such as regulatory clarity, macroeconomic easing, or institutional re-entry — speculative assets may remain under pressure.

Frequently Asked Questions (FAQ)

Q: Why did Bitcoin drop below $60,000 in April 2025?
A: A combination of factors contributed: cooling demand for spot ETFs, lackluster reaction to the halving event, stronger-than-expected U.S. economic data delaying Fed rate cuts, and weak performance of Hong Kong’s newly launched ETFs.

Q: Are Bitcoin ETFs still attracting investors?
A: Not currently. After record inflows in March ($4.6 billion), U.S. spot Bitcoin ETFs saw $182 million in net outflows by April 29. Investor interest appears to be pausing amid broader market uncertainty.

Q: Did the Bitcoin halving boost prices this cycle?
A: No. Unlike previous cycles where halvings preceded rallies, the April 19 event had little immediate impact on price — likely because it was widely anticipated and already reflected in market valuations.

Q: How are mining companies affected by falling Bitcoin prices?
A: Mining firms face dual pressures: lower BTC prices reduce revenue, while the halving cut their block rewards in half. This squeeze affects profitability, especially for less efficient operators.

Q: What role did Hong Kong ETFs play in April’s market?
A: Despite hopes for renewed momentum, Hong Kong’s spot Bitcoin ETFs launched with minimal volume ($11 million combined Day 1 trades), failing to spark investor confidence or drive significant capital inflows.

Q: Is this market dip a buying opportunity or start of a bear phase?
A: Analysts are divided. Some see value emerging below $60,000; others caution that without macro support or regulatory clarity, further downside is possible before recovery can begin.

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Core Keywords

While April proved harsh for digital assets, history suggests that periods of consolidation often precede renewed growth. For now, investors are watching key levels closely — waiting for signs of stabilization, fresh demand, or policy shifts that could reignite the next chapter of the crypto cycle.