The crypto market went into a tailspin over the 24 hours before a sharp recovery midday Friday as investors begin to wonder how healthy the economy is and if the high valuations for risky assets are justified. Despite being sold as a hedge against inflation and the economy, crypto traded like a growth stock, and that’s become a headwind in 2025.
As of 2:00 p.m. ET, Bitcoin (BTC 0.34%) is flat over the previous 24 hours, but it earlier fell over 6% and broke below $80,000; Ethereum (ETH -2.08%) is off 4% but was down as much as 9.7% at midday; and Dogecoin (DOGE -1.11%) has fallen as much as 12.5% before recovering to a 3.9% loss. This is ahead of the weekend, when liquidity usually goes down, which could result in more trading volatility.
Economic reality collides with speculation
The run in crypto over the past four months has been driven by speculation that the new presidential administration would…
