Bitcoin Crashes 45% From Record Highs – Is It Time to Buy the Dip Through ASX Bitcoin ETFs?

Bitcoin has had a shocking few months. The world’s biggest cryptocurrency has lost nearly half its value since October 2025, dropping from a record high above US$126,000 to around US$69,000 this week. The worst of it came on 6 February, when Bitcoin briefly crashed below US$61,000 before bouncing back. This decline has wiped out all of Bitcoin’s gains since President Trump took office and signalled support for the crypto industry. For Australian investors who prefer a regulated route into Bitcoin, the crash has dragged ASX-listed Bitcoin ETFs to multi-month lows, raising the question of whether this is a buying opportunity or the start of something worse.

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Why Did Bitcoin Crash, And Why Didn’t It Act Like ‘Digital Gold’?

The primary reason for this sharp decline is a significant shift in demand from large investors. Data from CryptoQuant shows that US spot Bitcoin ETFs bought around 46,000 BTC during this same period last year. In 2026, those same funds sold roughly 10,600 BTC instead. That’s a swing of over 56,000 Bitcoin in demand, a huge shift. On top of that, around US$6.2 billion flowed out of US Bitcoin ETFs between November and January, according to SoSoValue data reported by CoinDesk.

Selling pressure increased further due to forced liquidations. In early February alone, more than US$16 billion worth of leveraged crypto positions were wiped out, as falling prices triggered margin calls. Investor sentiment collapsed, with the Crypto Fear & Greed Index dropping to 9, its lowest level since the 2022 bear market.

Most worrying for long-term investors, Bitcoin did not behave like a safe-haven asset. While gold surged above US$5,000 an ounce, Bitcoin fell alongside tech stocks. This weak performance challenges the idea of Bitcoin as “digital gold” and is something investors should think carefully about going forward.

Beyond selling pressure, a shift in US monetary expectations has also rattled the market. The nomination of Kevin Warsh as the next Fed Chair on January 30 has signalled a potential ‘liquidity squeeze,’ as investors fear a faster reduction in the Fed’s balance sheet. This has seen Bitcoin lose its ‘digital gold’ status temporarily, acting instead like a high-beta tech stock while physical gold soared past US$5,000.

Three ASX Bitcoin ETFs- A Simpler Way to Buy In

Australian investors who want Bitcoin exposure without managing crypto wallets or navigating unregulated exchanges have several ASX options. The VanEck Bitcoin ETF (ASX: VBTC) is the most widely traded, now sitting well below its 52-week high of A$38.50. The Global X 21Shares Bitcoin ETF (ASX: EBTC) was the first spot Bitcoin ETF launched in Australia, and the DigitalX Bitcoin ETF (ASX: BTXX) rounds out the choices. All three hold actual Bitcoin through regulated custodians and trade on the ASX like any other share. This simplicity matters, especially during periods of market stress. The ETF structure removes the operational risks of holding crypto directly.

The Investor’s Takeaway

At US$69,000, Bitcoin is trading roughly 45% below its all-time high. The average cost basis for US ETF investors sits at approximately US$84,000 according to CoinDesk, meaning current prices are below where most institutional buyers entered, a level that has historically marked local bottoms. However, the downside risks are real. 10X Research estimates Bitcoin could fall to US$50,000, while Stifel has modelled a scenario reaching US$38,000 based on prior cycle data.

In our view, this is not the time to go all-in, but it may be the time to start building a position gradually. If you’re comfortable with risk and can hold for a few years, gradually buying into VBTC or EBTC bit by bit, known as dollar-cost averaging, makes sense at these prices. The key level to watch is US$70,000.

Analysts at Bitbank have called this a critical floor; if Bitcoin drops and stays below it, another fall towards US$60,000 is likely. More cautious? Wait until the big sellers back off and money starts flowing back into ETFs. That would be a much clearer sign that the worst is over.