The market value of 1.2 trillion US dollars evaporated within six weeks, Bitcoin once fell to the important threshold of 80,000 US dollars and disappeared.

The price of Bitcoin plummeted on Friday, falling to as low as $80,632, approaching the key psychological and technical level of $80,000. Several analysts warned that if it falls below this level, the world's largest cryptocurrency may face even greater declines. Ethereum also dropped to a four-month low, with cryptocurrencies becoming the main battleground for investors selling risky assets. Concerns about the overvaluation of tech stocks and uncertainty about whether the US will further cut interest rates in the short term have fueled investors to reduce overall risk exposure. High volatility cryptocurrencies are seen as a barometer of market risk appetite, and the continued decline of Bitcoin highlights the fragility of recent market sentiment. Bitcoin has fallen by 12% this week and has given back all gains made this year, now down by around 12% for the year, while Ethereum has seen a nearly 19% decline. Although Bitcoin hit a historic high of over $120,000 in October this year on expectations of regulatory improvements, the market has not fully recovered from the record single-day crash last month when positions worth over $19 billion were liquidated, causing a profound impact on investment sentiment. As Bitcoin fell below $100,000 last week and continued to approach $80,000, some institutions have pointed out that Bitcoin is approaching the average holding cost range for corporate and institutional investors. If prices continue to decline, some investors may face forced selling pressure. IG Markets analyst Tony Sycamore said, "If Bitcoin's price movement reflects overall risk sentiment, the market could become very unstable next, which is the biggest concern right now." The sharp drop in Bitcoin has also put significant pressure on cryptocurrency treasury companies that have bought large amounts of cryptocurrencies this year. These companies hold tokens such as Bitcoin as part of their balance sheets, betting on long-term price increases. Standard Chartered Bank estimates that if Bitcoin falls below $90,000, about half of these companies' holdings will be "underwater," meaning the market value is lower than the purchase cost. If the situation worsens, these companies may need to raise new funds or be forced to sell their cryptocurrency holdings, further pressuring the market to decline. According to Standard Chartered's estimate, listed companies collectively hold about 4% of circulating Bitcoins and 3.1% of Ethereum. Brent Donnelly, President of analysis firm Spectra Markets, pointed out, "The pro-cyclical nature of cryptocurrency treasury companies is now fully exposed. They typically buy at high prices, and now some companies are selling at low prices." Citigroup analyst Alex Saunders emphasized that $80,000 is an extremely critical price range because it is near the average holding cost of Bitcoin ETFs, and once breached, it may bring more pressure to ETF investors. CoinGecko data shows that the total market value of the cryptocurrency market has evaporated by about $1.2 trillion over the past six weeks. As the price of Bitcoin falls, the stocks of companies that have risen this year due to increasing their Bitcoin positions have seen significant adjustments. One of the companies holding the most Bitcoin, Strategy (MSTR.US), has plummeted by 61% since its July peak, nearly a 40% decline for the year. JPMorgan Chase pointed out this week that Strategy may be excluded from the MSCI index, which, if true, could trigger further passive selling. In terms of historical data, both the major Bitcoin retracements in 2018 and 2022 saw a decline of 75% to 80%. Donnelly warned that if history repeats itself, the price of Bitcoin could theoretically fall to around $25,000. He wrote, "I'm not declaring a new crypto winter, but I must remind everyone that 75% to 80% major retracements are not uncommon in Bitcoin's history."