Nearly 500-billion dollars has been erased from the cryptocurrency market in less than a week as investors rushed to sell, led by sharp losses in Bitcoin.

Bitcoin fell on Tuesday to its lowest level since early November 2024, when Donald Trump won re-election and raised expectations of a more crypto-friendly US administration. The world’s largest cryptocurrency briefly dropped to 72,877 dollars, a 15-month low, before recovering slightly.

By Wednesday morning in Asia, Bitcoin was trading around 76,200 dollars in Singapore. Even with the rebound, it is down 13pc so far this year and nearly 40pc below its October peak, when it traded above 126,000 dollars.

Market sentiment remains fragile. “Asia morning sentiment is cautious and defensive,” said Rachael Lucas, an analyst at BTC Markets, Bloomberg reported.

While forced selling has slowed compared with US trading hours, she said Bitcoin’s drop below 73,000 dollars has pushed investor confidence into “extreme fear.”

The selloff follows a turbulent week in global markets, which also saw large price swings in gold and silver. Precious metals found some support on Tuesday after recent losses, but cryptocurrencies did not.

As tensions between the US and Iran escalated, investors moved away from riskier assets, sending both Bitcoin and US stocks lower.

Bitcoin’s sharp decline is also reviving doubts about its role as “digital gold.” Unlike traditional safe-haven assets, it has failed to attract buyers during a period of heightened geopolitical uncertainty. Investor Michael Burry warned this week that Bitcoin has been exposed as a purely speculative asset, rather than a reliable hedge like precious metals.

Michael Novogratz, chief executive of Galaxy Digital, said the selloff reflects a shift in long-held investor behavior. “There has historically been a tremendous amount of near-religious belief in holding Bitcoin no matter what,” he said on an earnings call. “That fever has broken, and we’re now seeing people sell.”