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What is happening to Bitcoin?

Something interesting is happening to the crypto-currency Bitcoin.

Over the past 28 days it has plunged more than 30 percent in value from a high of NZ$138K per coin to less than NZ$104K.

Supporters of the coin say that fluctations are normal and that now, during the "dip", is a great time to buy.

I'm not so sure.

Back in October of 2025, BTC was an astonishing NZ$210K so it's pretty fair to say that it's almost halved in value over an 18 month period and that trend shows no sign of change.

Now I'm no Bitcoin or crypto expert so take my observations with a grain of salt but I can't help wondering if the international Crypto-Asset Reporting Framework (CARF) scheme has made the currency a little less valuable to those who saw its biggest benefit being the levels of anonymity it once offered.

This scheme has been phased in across the globe over the past year or two and must have made BitCoin and other crypto currencies much harder to use for money laundering and illicit trading.

Then there's the ever-increasing price of energy.

Averaged across the globe, we've seen an almost 10 percent hike in electricity prices and that looks set to continue climbing, as the demand from AI datacentres continues to grow.

Interestingly enough, we're now seeing former crypto-mining enterprises shift to become AI datacenters, repurposing their valuable mining rigs to become the home of AI models rather than crypto mining software.

Just one example of this lack of profitability and the resulting pivot was seen in Sweden where HIVE has switched from mining to AI.

A further driving force appears to be a number of high-profile cash-outs involving massive sums of BTC which have been liquidated in to fiat currency. This alone has created a degree of fear in the crypto marketplace, prompting flow-on sell-offs by others.

Now we have the imminent SpaceX IPO which is expected to raise around US$75 billion. That money has to come from somewhere and given that some of Elon Musk's strongest supporters are heavily vested into cryptocurrency, it's likely many of those will be converting their BTC to cash so they can buy up stock in the initial offering.

Combine all these influences and you can see that there is presently an incredible downward pressure on BTC. Whether this is transient or speaks to a longer-term outlook is hard to say.

Personally, I don't hold any BTC or any other crypto-currency. I have enough trouble hanging on to the few dollars I do earn to take speculative risks.

Carpe Diem folks!

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