Bitcoin is having an existential crisis

• The nomination of Kevin Warsh as Fed chair gave bitcoin the final push to its lowest level since November 2024.
• The king crypto has also struggled to recover from a risk-off rotation that stocks shrugged off with ease.
• Hanging over bitcoin's future is what Michael Saylor's firm Strategy plans to do with his hoard.

It's entirely possible you missed the recent meltdown in bitcoin. Not to project, but there were other sell-offs in the likes of gold and silver sucking up most of the oxygen and attention. First Trade flicked at the losses, but it's time to give what's happened its full due.

The most recent damage absorbed by bitcoin came after the nomination of Kevin Warsh as the Federal Reserve's new chair. Warsh is viewed as a hawk — especially when it comes to the size of the central bank's balance sheet — and hawkishness is bad for risk assets like crypto.

The Warsh development explains the latest leg down, which pushed the price of bitcoin to its lowest level since Trump's election victory in November 2024.

But that's just the last 10% or so, in the last few days. What about the nearly-30% plunge in the several months before that?

In the fourth quarter of last year, investors rotated out of riskier assets like tech stocks and crypto. This coincided with the Fed taking a more conservative tone around future rate cuts, after having already eased multiple times in 2025.

But as stocks have since recovered to a series of fresh records, bitcoin has continued to flounder. Blame crypto-specific headwinds like delays in the passage of key crypto-regulation measures.

And then there are the bitcoin-treasury firms, most notably Strategy, which have positioned their businesses around amassing as much of the crypto as possible. As the price of bitcoin has tumbled, so has speculation that these big institutions could be forced to sell in size.

The level to watch is $76,000. That's the average that Strategy has paid for its tokens. If the price of bitcoin has fallen below it, that means the firm is sitting on paper losses. The mere prospect of that has investors on edge.

The commentary surrounding the latest bitcoin sell-off has been less than encouraging. John Blank, the chief strategist at Zacks Investment Research, says the token could sink all the way to $40,000 — about 45% below current levels. He also laid out three reasons why the ongoing crypto winter could last for months longer.

Even famed "Big Short" investor Michael Burry got in on the action. He didn't explicitly call for further losses in bitcoin, instead focusing on a trio of "sickening" scenarios that could play out if the crypto keeps falling.

No matter how you slice it, bitcoin is in a tough spot right now. What happens with Strategy, and how far below their market net asset value it can trade, will be top of mind for investors.

In the meantime, the crypto market is only enticing for traders looking to bottom-fish. Fortune does tend to favor the bold, but you'd have to have serious guts to buy in right now.