February 3, 2025 – The cryptocurrency market faced a sharp downturn as Bitcoin (BTC) plummeted to $91,163, marking its lowest level in over three weeks. This drop triggered a significant sell-off in Asian cryptocurrency-related stocks, with major companies experiencing notable losses.
Bitcoin’s Decline Sparks Crypto Stock Sell-Off
The sharp decline in Bitcoin’s price sent shockwaves across Asian markets, leading to steep losses for cryptocurrency-related companies.
📉 Japan’s Metaplanet, often referred to as the Asian MicroStrategy due to its Bitcoin-heavy treasury strategy, saw a 9.44% drop in its stock value on the Tokyo Stock Exchange.
📉 SBI Holdings, one of Japan’s leading crypto and blockchain investors, recorded a 3.60% decline as investor confidence wavered.
📉 Hong Kong’s OSL Group, the city’s first licensed crypto exchange operator, suffered a 2.69% dip, reflecting growing market uncertainty.
📉 Boyaa Interactive, recognized as the largest publicly traded Bitcoin holder in Asia, recorded a 4.64% loss, adding to the broader crypto sector’s woes.
Experts believe that these steep declines are not just a reaction to Bitcoin’s fall but are also influenced by geopolitical tensions, tariffs, and investor sentiment.
Crypto Stocks Outperform Broader Market Declines – But Not in a Good Way
The downward trend in crypto stocks was more severe than the broader market losses.
🔻 Japan’s Nikkei 225 Index declined 2.66%, signaling a turbulent trading session.
🔻 Hong Kong’s Hang Seng Index, however, remained relatively unchanged, edging down by only 0.04%.
This suggests that crypto-related stocks bore the brunt of market-wide uncertainty and investor panic, reflecting higher volatility compared to traditional financial sectors.
Trade War and Tariffs Add to Crypto Market Pressure
The global market downturn was fueled by rising trade tensions, as U.S. President Donald Trump imposed 25% tariffs on imports from Mexico and Canada, along with 10% tariffs on China.
In response, both Mexico and Canada vowed retaliatory tariffs, while China announced it would escalate the dispute at the World Trade Organization (WTO).
💬 “While this initially doesn’t look crypto-related, tariffs hint at a potential trade war, leading to a broad sell-off in risk assets, which then include Bitcoin, Ether (ETH), and all other cryptocurrencies,” explained Justin d’Anethan, head of sales at token launch advisory firm Liquifi.
The uncertainty surrounding global trade policies has left investors on edge, leading to an increased flight to safety from high-risk assets like cryptocurrencies.
Crypto’s Lunar New Year Rally Faces Disruption
Historically, the Lunar New Year trading window has been a bullish period for cryptocurrencies.
📊 Data from digital asset firm Matrixport highlights that Bitcoin has seen positive gains in 83% of Lunar New Year trading periods over the past 10 years.
💡 However, this year’s sharp Bitcoin drop threatens to break this winning streak, with investors questioning whether the seasonal trend will hold amid broader economic turmoil.
What’s Next for Bitcoin and Crypto Stocks?
💰 Short-Term Outlook: Market analysts are closely monitoring Bitcoin’s next support levels at $90,000 and $88,500. If these fail to hold, a further slide toward $85,000 could be on the horizon.
📈 Long-Term Perspective: While volatility is high, long-term Bitcoin investors remain optimistic, citing historical recovery trends following similar sell-offs.
🌏 Geopolitical Factors: The ongoing trade war tensions and global economic uncertainty will continue to play a major role in shaping crypto market movements. The cryptocurrency market downturn, combined with global trade tensions, has sent Asian crypto stocks into a tailspin. With Bitcoin struggling to regain momentum and investors fearing prolonged volatility, market conditions remain fragile.
While the Lunar New Year period has historically been a bullish window for crypto, the current macroeconomic headwinds pose a significant challenge. As the market digests these factors, traders and investors must stay cautious, informed, and prepared for further fluctuations in the coming weeks.
