Bitcoin’s $1 trillion identity crisis – ‘The issue isn’t price, it’s purpose’

For months, the crypto market has been trying to return to October’s $125,000 peak, but the excitement of “Uptober” has now turned into a long and tiring downturn.

Bitcoin’s price near $68,000 indicates that it is not just a small dip. It shows deeper weakness in the market, with about $420 billion wiped off its total value in just a few weeks.

While a 23% monthly drop is normal in crypto, the bigger problem is what many now call the institutional trap.

The big wave of institutional money that once seemed promising is now losing strength. A brief moment of hope came on the 20th of February, when $88.1 million flowed into Bitcoin [BTC] ETFs.

But overall data from Farside Investors shows that more money is leaving than entering.

Thus, as Bitcoin’s market value drops from $1.76 trillion to $1.34 trillion, an important question remains: Where is Bitcoin heading? 

Remarking on the same, Walter Bloomberg took to X and noted, 

“Bitcoin has dropped over 40% from its peak, but the bigger issue isn’t price — it’s purpose.”

Is Bitcoin losing ground?

While real gold prices have been rising, Bitcoin has been falling. The Bitcoin-to-Gold ratio has dropped over a year.

In 2024 and 2025, investors bought Bitcoin as a hedge against inflation. Now, many of them are selling Bitcoin to buy physical gold instead.

Additionally, the money that once pushed Bitcoin prices higher is now moving to other parts of the crypto market that seem more useful.

Source: CoinMarketCap

Moving forward, even as Bitcoin’s market value fell by more than 24% last month, stablecoins stayed strong. Tether’s USDT dropped only 1.7%, while Circle’s USDC actually grew slightly. 

Source: CoinMarketCap

Another big challenge for Bitcoin is the rapid growth of prediction markets. After Kalshi won its case against the CFTC, betting on political and global events became much more popular. This is now a multi-billion-dollar industry.

Traders who once used Bitcoin for high-risk bets are now putting their money into election and event-based contracts. These markets offer clearer outcomes and faster results than waiting for Bitcoin’s price to move.

However, despite all the downtrends, Walter Bloomberg noted, 

“Bitcoin remains the most established crypto asset and has survived past crises.”

Why Bitcoin still rules?

Even though Bitcoin’s price is weak, it still leads the crypto market, with nearly 60% of total investment going into it. Most investors continue to choose Bitcoin over other coins.

The Altcoin Season Index was at 32 at press time, showing that Bitcoin is still outperforming most cryptocurrencies.

When the market becomes uncertain, investors avoid risky small coins and stick with the most trusted name in crypto. The Bitcoin network itself is also staying strong and stable.

Source: Glassnode

Since September 2025, Bitcoin’s mining difficulty has mostly been falling, making it slightly easier for miners to earn rewards.

It did reach a high point on the 6th of February, when many miners were competing at once, but since then, the difficulty has eased as the network adjusted.

Therefore, despite current weakness, Bitcoin’s dominance and network strength show it is far from irrelevant.

Final Summary

• Bitcoin’s price decline reflects deeper structural issues, not just short-term market weakness.
• Despite these challenges, Bitcoin still dominates nearly 60% of the crypto market.