Prediction markets expect Bitcoin to drop below $60k as bears get stronger

Bitcoin is spiraling, and the numbers paint an ugly picture. In just five days, prediction markets have slashed forecasts, now betting that Bitcoin will drop below $60,000 in 2025. That’s an $18,000 shift since February 23, according to Kalshi.

At the same time, optimism for a rally has collapsed— the odds of Bitcoin hitting $150,000 before 2026 have nosedived from 55% to 29%.

Over 64k forecast on BTC dropping below $60,000 in 2025. Source: Kalshi

The downturn comes after Bitcoin plunged 28% from its all-time high of $109,000 on January 20, the same day Donald Trump was sworn in as U.S. president. Analysts and traders are scrambling to explain the steep losses, pointing to a mix of macroeconomic fears, a massive exchange hack, Bitcoin ETF outflows, and fading optimism about Trump’s crypto policies.

Bitcoin gets dragged down by macroeconomic fears

Bitcoin isn’t the only asset struggling—stocks are falling too. The Nasdaq 100 Index has dropped 7% since February 19, while the U.S. Treasury market has seen a rush of investors seeking safety. Bitcoin, which traders often call a “high beta” asset, moves more aggressively than traditional markets, so when stocks dip, crypto usually falls even harder.

A big driver of the selloff is Trump’s trade policy. Investors are spooked by new tariffs the White House is planning. “This tanking can be viewed as a response to macro fears on Trump’s tariffs and geopolitical uncertainty,” said Caroline Bowler, CEO of BTC Markets.

The dip in stocks, and a concurring rally in US Treasuries, has been attributed to concerns about the potential economic effects of Trump’s plans to impose further tariffs on trading partners.

Bybit’s $1.5 billion hack triggers panic

The downward spiral accelerated after a $1.5 billion hack hit Bybit, one of the largest crypto exchanges, on February 21. The attack, which cybersecurity experts have linked to North Korea’s Lazarus Group, was the largest crypto heist in history.

Unlike past hacks, this one targeted a cold wallet, a type of storage that’s supposed to be ultra-secure because it’s not connected to the internet. Bitcoin and Ethereum both tumbled to multi-month lows, with traders fearing more hacks or security failures.

Zaheer Ebtikar, co-founder of Split Capital, said the attack destroyed confidence. “Confidence got shaken after the hack of $1.5 billion, which is quite a bit of money,” he said.

Another major force behind Bitcoin’s slide? ETF investors are running for the exits.

In February alone, spot Bitcoin ETFs recorded a net outflow of $3.3 billion, the largest monthly withdrawal since their launch in January 2024, according to Bloomberg. The cycle is brutal—when Bitcoin’s price drops, investors pull money out of ETFs, which triggers even more selling.

BTCUSDT 1-hour price chart. Source: TradingView

The outflows have also crushed a popular hedge fund strategy known as the “cash and carry trade”. This involves taking advantage of the price difference between spot and futures markets. When Bitcoin futures trade at a premium, traders sell futures and buy spot Bitcoin to pocket the spread. But those premiums have collapsed.

Data from K33 Research shows March Bitcoin futures premiums dropped to 5.7%, the lowest since July 2024. CME futures traders have turned defensive, signaling weak confidence in Bitcoin’s short-term price action.

“The ETF outflows in the U.S. were driven mostly by arbitrage players like hedge funds playing a basis trade via futures and/or options,” said Mark Connors, founder of Risk Dimensions. He noted that while some long-term holders are selling, much of the exodus has been from traders cashing in on arbitrage trades.

Trump’s crypto promises fail to deliver, disappointing traders

Bitcoin surged in late 2023 and early 2024 on expectations that Trump’s presidency would be a game-changer for the industry. But so far, his administration hasn’t followed through on many of its promises, and traders are getting restless.

During his campaign, Trump vowed to create a Bitcoin strategic reserve, using seized crypto assets already held by the U.S. government. His ally, Senator Cynthia Lummis, introduced a bill to build a national stockpile of up to 1 million Bitcoin over five years. But the plan has stalled, and Lummis’ bill has failed to gain momentum in Congress.

Instead of immediate pro-crypto action, Trump’s executive order on digital assets only called for further studies—far from the major policy shift traders had been banking on. “What’s been driving this is the lack of positive executive-order news some pundits were expecting, and U.S. inflation numbers,” said Paul Howard, senior director at Wincent.

Even state governments that were once friendly to Bitcoin are backing away. Montana, North Dakota, South Dakota, and Wyoming—all states that have historically embraced crypto—recently voted against setting up their own Bitcoin reserves. Lawmakers cited volatility concerns and the risks of holding digital assets.

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