‘My retirement is completely in bitcoin’: After bitcoin crashed 50%, holders face serious risks. What this downturn reveals for crypto investors

Bitcoin has a long history of stomach-churning price swings, but the latest drop has shaken even committed believers. After reaching highs above $126,000 earlier this year, bitcoin tumbled below $70,000, briefly falling to the low $60,000s and erasing all gains since President Donald Trump’s election. The sell-off has puzzled many investors who expected a crypto-friendly administration to boost prices. John Blank, chief equity strategist at Zacks Investment Research, warned that bitcoin could fall as low as $40,000 if the downturn persists. The downturn is notable due to how intertwined crypto has become with the broader financial system via spot bitcoin ETFs and corporate holdings. For investors who borrowed money to bet on bitcoin’s rise, the crash has been catastrophic, leading to margin calls and potential liquidations. One investor highlighted by MarketWatch had her entire retirement in Bitcoin and used leverage through platforms like Firefish. Experts suggest limiting crypto exposure to 1% to 5% of a diversified portfolio to mitigate such extreme risks.