Bitcoin Price Drops as Wall Street Investors Sell, Affecting Funds in 2025

Bitcoin's price is falling after Wall Street investors pulled money out. This caused a 30% loss for the Brevan Howard crypto fund in 2025.
By Newsroom | Finance, Cryptocurrency |

Bitcoin's recent surge, fueled by Wall Street's embrace, has now exposed it to new vulnerabilities, leading to price pressures and varied expert outlooks.

The entry of substantial capital, particularly from American investors, initially propelled Bitcoin to record highs. This influx was expected to bring stability, reducing the impact of leverage and creating a more balanced market. However, as enthusiasm wanes and this capital begins to retreat, Bitcoin appears to be experiencing increased volatility and selling pressure. This shift raises questions about the sustainability of its previous gains and its future trajectory.

Wall Street's Role in Bitcoin's Volatility

Bitcoin's integration into the traditional financial system, often termed "Wall Street's embrace," has been a double-edged sword. While it brought increased legitimacy and capital, it also tethered Bitcoin's performance to the ebb and flow of this traditional investment.

Bitcoin won over Wall Street and now it’s paying the price - 1

  • Capital Influx: Large sums of money entered the Bitcoin market, contributing to its rapid ascent.

  • Dependence on US Investment: The reliance on American capital now presents a challenge as this investment appears to be pulling back.

  • Reduced Leverage: While intended to stabilize the market, less leverage means fewer large buyers when prices rise and fewer natural absorbers when selling occurs.

Signs of a Bearish Trend

Several analysts point to indicators suggesting Bitcoin may still be in a downward trend rather than having reached its lowest point.

  • Increased Volatility: Bitcoin is experiencing rising volatility, which is often a sign of a continuing bear trend, not a bottom.

  • Retail Capitulation: Data suggests that retail investors are selling, a pattern typically seen towards the end of a bear market.

  • Altcoin Selling Pressure: Significant selling pressure on other cryptocurments, known as altcoins, has reached a multi-year extreme, indicating broader market weakness.

  • Historical Patterns: In past cycles, bear trends only weakened after volatility peaked and then decreased.

Impact on Investment Funds

The performance of Bitcoin has directly affected investment funds that hold it, illustrating the real-world consequences of market downturns.

Read More: Citadel Securities hiring systematic traders in 5 cities with $150k-$325k salary

Bitcoin won over Wall Street and now it’s paying the price - 2

  • Brevan Howard Fund: The crypto fund managed by Brevan Howard experienced a 30% slump in 2025, directly linked to the decline in Bitcoin's price. This highlights the direct financial impact on institutional investors.

Factors Influencing Bitcoin's Value

The valuation of Bitcoin is influenced by a complex interplay of market dynamics, investor sentiment, and underlying technological aspects.

  • "Trump Trade" Influence: Some market observers have linked Bitcoin's recent price movements, particularly its surge past $100,000, to the outcome of US presidential elections, labeling it a "Trump Trade." This suggests that political events can significantly impact investor behavior.

  • Halving Event: The programmed reduction in Bitcoin rewards for miners, known as the "halving," occurs approximately every four years. This event inherently limits the supply of new Bitcoins, which has historically been a factor in price increases.

  • Scarcity: With a finite limit of 21 million coins, Bitcoin's design emphasizes scarcity, a fundamental aspect of its value proposition.

  • Protection Against Traditional Finance: Bitcoin was initially created as an alternative to traditional financial systems. However, its current price movements indicate a growing dependence on these very systems.

Expert Analysis and Market Sentiment

Views on Bitcoin's future remain divided, with some analysts expressing caution while others remain optimistic about its long-term potential.

"Bitcoin is still in a bear-phase regime, with volatility increasing rather than contracting. This pattern is typically associated with trend continuation rather than with long-lasting bottoms." - Willy Woo (as cited in Article 2)

  • Woo's observation suggests that current market conditions are not indicative of a market bottom.

  • He further notes that major market bottoms usually follow a series of smaller volatility spikes, signaling widespread selling by retail investors.

The potential downside for Bitcoin exists, especially if the crypto market is ultimately seen as overvalued. - Implied sentiment from Article 4

  • This perspective underscores the inherent risks associated with investing in volatile assets like Bitcoin.

  • The comparison to "the emperor’s new clothes" suggests a concern about speculative bubbles.

Conclusion

Bitcoin's journey from a niche digital asset to a prominent fixture on Wall Street has brought both opportunity and new challenges. The influx of institutional capital, while driving previous gains, has also created a dependency that is now being tested by capital withdrawal and increased market volatility. Indicators suggest that the current price weakness may persist, with analysts observing patterns consistent with a bear market rather than a definitive bottom. While the long-term outlook remains a subject of debate, influenced by factors from political events to the inherent scarcity of Bitcoin, the current phase appears to be one of price correction and recalibration within a more traditional financial context.

Read More: How to Move USD Between Crypto.com and Your Bank Account in 2024

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Frequently Asked Questions

Q: Why is the Bitcoin price falling after Wall Street invested?
Bitcoin's price is falling because large US investors are selling their Bitcoin. This follows a period where their investment had pushed prices up, but now they are pulling money out, causing selling pressure.
Q: How did Wall Street's investment affect Bitcoin's price?
Wall Street's investment brought a lot of money into Bitcoin, which helped the price go up a lot. However, this also made Bitcoin's price depend more on these big investors, and now that they are selling, the price is going down.
Q: What happened to the Brevan Howard crypto fund in 2025?
The Brevan Howard crypto fund lost 30% of its value in 2025. This happened because the price of Bitcoin, which the fund holds, dropped significantly.
Q: Are experts saying Bitcoin will go up or down?
Some experts think Bitcoin might still be in a downward trend, called a bear market. They see more selling and higher price changes, which usually means the price will continue to fall for a while.
Q: What other factors are influencing Bitcoin's value?
Bitcoin's value is also affected by things like the upcoming 'halving' event, which limits new supply, and its total limit of 21 million coins. Political events, like US elections, can also make investors buy or sell.