Bitcoin sinks toward one-year low on geopolitical fears and US instability

Bitcoin plummeted to near the $78,000 mark early Feb. 1, approaching its lowest level in a year. The digital currency shed more than 7.5% of its value within 24 hours, at one point hitting a low of $77,600 and breaching the critical $80,000 support level.

The retreat represents a 39% correction from Bitcoin's record high of more than $126,000 reached in October 2025. Other major cryptocurrencies also saw significant losses, with Ether sliding more than 13% while XRP, ADA, and ZEC all dropped by more than 10%.

Analysts attributed the sell-off to rising geopolitical tensions following an explosion at Iran’s Bandar Abbas port and the looming risk of a U.S. government shutdown. These factors have prompted investors to exit risky assets in favor of gold, which is traditionally viewed as a safe haven.

Market experts say the cryptocurrency sector is facing a broad liquidation as investor confidence wavers. The latest slump follows a six-month period in which Bitcoin has consistently underperformed compared to gold.

Bitcoin’s latest retreat is more than a mere technical correction; it is a direct reflection of escalating macroeconomic and geopolitical friction. As investors liquidate risk assets in response to hostilities in Iran and the looming threat of a U.S. government shutdown, the price action underscores a fundamental reality: the market continues to price Bitcoin as a high-beta play on technology rather than "digital gold" or a credible safe-haven.

The flight to safety is currently favoring traditional bullion, marking a distinct capital rotation into tangible assets. This trend suggests that during periods of systemic instability, the investing class remains tethered to historical stores of value over nascent financial instruments. Bitcoin’s six-month streak of underperformance relative to gold further weakens the narrative of the cryptocurrency as a reliable hedge against volatility.

Market participants are now laser-focused on the $75,000 support level. This is a critical psychological threshold that previously anchored the market during the April 2025 sell-off, a period characterized by heightened anxiety over tax policy shifts under the Trump administration. A decisive break below this floor could intensify selling pressure, potentially exposing the asset to a deeper correction toward the $58,000 support zone.

While the prevailing mood is grim, some contrarian analysts suggest that extreme retail pessimism may signal a short-term bottoming process. Historically, digital asset markets have demonstrated a tendency to pivot against the consensus; however, given the current geopolitical headwinds and fiscal uncertainty, such a recovery remains a high-risk proposition.

For a significant segment of the Vietnamese-American community, particularly the younger generation, cryptocurrency has emerged as a popular vehicle for investment and speculation alongside traditional mainstays like the nail salon industry and phở restaurants. In cultural hubs like Little Saigon, digital assets are increasingly seen as a modern path to wealth, appealing to everyone from H-1B professionals to families navigating F2B or EB-5 visa processes. However, the recent Bitcoin crash serves as a sobering reminder of the market’s extreme volatility and high-risk nature. For those who have shifted their focus from steady remittances to the digital market, this downturn underscores the precariousness of modern portfolios and the potential impact on the diaspora’s collective financial stability.