Huge $15 trillion Bitcoin price bet helps stem sudden crypto sell-oOff

Bitcoin and other cryptocurrencies have taken a hit following a substantial rally spurred by Donald Trump's victory in the U.S. presidential election. Despite Elon Musk hinting at a major shift in the crypto market, the bitcoin price has dropped to around $90,000, down from nearly $100,000 earlier this week. This correction has resulted in a $200 billion loss in the combined $3.2 trillion market cap.

A recent leak suggesting a significant Wall Street shake-up in the coming year has traders on edge, speculating how low bitcoin might go. Crypto billionaire Michael Novogratz warned that bitcoin could fall to $80,000 before recovering.

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Traders were caught off guard by the market downturn. "There’s a ton of leverage in the system right now," said Novogratz, CEO of Galaxy Digital, on CNBC. "The crypto community is leveraged to the gills, so there will be a correction."

Novogratz believes bitcoin will not fall below $80,000, where it was before Trump's election win, which he described as a "paradigm shift" for crypto regulation. He added, "The entire cabinet almost owns bitcoin and are proponents of digital assets," suggesting that bitcoin crossing the $100,000 mark is inevitable. "Normally, you hit $100,000, you bounce off a bit," he said. "I would not be surprised if we go much higher. We're in price discovery. There's not a lot of supply."

Update: November 27, 2024

The bitcoin price has rebounded to around $90,000 after a sharp drop, as bullish traders regained control of the market. Since Trump's election, the crypto market has surged, driven by expectations of reduced regulation that the industry believes has been stifling growth.

Dan Morehead, founder of crypto investment firm Pantera, predicts that the Trump administration could help bitcoin reach $740,000 by April 2028, giving it a market cap of $15 trillion. "It's not an inconceivable number, relative to $500 trillion in financial assets," Morehead wrote in a blog post. He noted that Pantera's bitcoin fund has seen a 131,165% return since its launch in 2013. "Another order of magnitude seems plausible."