Bitcoin Price Update

Bitcoin (BTC) dipped below $89,000 during Tuesday’s early European hours, with Nasdaq futures indicating continued losses in technology stocks. The strengthening Japanese yen raised fears of heightened risk aversion similar to August.

The leading cryptocurrency fell to a low of $88,500, the lowest since mid-November, according to CoinDesk data. These losses come amid reluctance in the U.S. to adopt state-managed bitcoin reserves.

Valentin Fournier, analyst at BRN, noted that despite President Donald Trump’s pro-Bitcoin stance, all three state-level proposals for Bitcoin reserves failed in Montana, North Dakota, and Wyoming. He argued that the hesitation to implement state-run Bitcoin reserves highlights political risks as officials seek to avoid speculation accusations with taxpayer dollars.

Fournier suggested a nationwide reserve strategy backed by bond issuance or a partial sale of U.S. gold reserves could be a more feasible approach for future adoption.

Some analysts believe BTC’s downward movement aligns with a decline in the global money supply. Andre Dragosch, head of research Europe at Biwise, noted a lag between the global money supply and BTC prices, indicating that BTC’s price drop might be temporary as the money supply has recently bottomed out.

Currently, the focus is shifting to traditional markets, which indicate risk-off sentiment. Nasdaq futures fell by 0.3%, extending a three-day losing streak, as the tech-heavy index has dropped over 4% since February 18.

The anti-risk Japanese yen traded at 149.38 per USD, challenging its near three-month high of 148.84 from Monday. The yen’s value has increased nearly 6% in six weeks on speculation that the Bank of Japan (BOJ) may increase rates.

The speculation of a BOJ rate hike and yen strength has revived memories of July when the yen surged, causing a massive risk aversion that led to Bitcoin’s price crashing from around $65,000 to $50,000 within days.

Joseph Wang, operator of the research portal fedguy.com, pointed out last week that massive yen strengthening often occurs during significant risk-off periods.

*UPDATE (Feb. 25, 09:12 UTC): Adds additional details.