Crypto▼ Bearish
Central bank pivot slashes Bitcoin 52% from $126K peak
Bitcoin fell 52% from its 2025 peak as the ECB, Fed, and other major central banks pivoted back to tightening. Ether and Solana sold off around policy announcements. The Bank of England meets Aug. 7.
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The ECB's first rate hike in three years has pulled liquidity out of digital assets and cut Bitcoin's value by more than half since its 2025 peak.
Bitcoin fell from roughly $126,000 at the end of 2025 to about $60,000 by mid-2026, a 52% decline. The trigger was a coordinated shift in central bank policy after a long stretch of rate cuts that had fueled one of the most aggressive crypto rallies on record.
The European Central Bank moved first. On June 11 it raised its deposit facility rate by 25 basis points to 2.25%, the first increase since 2023. Inflation driven by geopolitical tensions in oil markets, with crude pushing past $88 a barrel in July, left the governing council with little room to hold, according to the ECB's June statement.
In July the ECB held rates steady but emphasized the unpredictability of future rate movements.
The Federal Reserve held its federal funds rate at 3.50%-3.75% through both June and July. Nine of 19 policymakers projected at least one hike by year-end in their June dot plot, though July labor data cooled some of that enthusiasm, the Fed's July statement showed.