What is Bitcoin as cryptocurrency’s price crashes to less than £71,000 amid uncertainty in market

Bitcoin has today dropped to its lowest value since November 2024, dipping below £71,000. This represents a 16.5 per cent drop in the value of the cryptocurrency, compared to its one-month high valuation in late January.

The change signifies hundreds of billions of dollars in lost value over the course of just a few weeks. Uncertainty over how Donald Trump and Elon Musk’s plans for the US will affect investors is thought to be a significant factor in this latest Bitcoin crash.

But as these digital currencies make headlines worldwide, questions have re-arisen on what exactly Bitcoin actually is. So, is Bitcoin ‘real’ money, and if not, what is it?

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Here’s everything you need to know about Bitcoin and crypto.

What is cryptocurrency?

Cryptocurrency, also known as crypto, is a digital currency that uses a type of coding called cryptography to verify transactions. The currency is stored and created electronically, without the use of banks.

Cryptocurrencies are traded on a computer network without a central authority, and are worth whatever people are willing to pay for them. Putting your money into crypto is a high-risk, high-reward investment, as the market is extremely fragile and can fluctuate significantly.

As of 2024, at least 17 people were billionaires from investing in crypto, according to Forbes’ World’s Billionaires list. These 17 crypto billionaires are worth a collective £73billion, more than double the £29billion in collective crypto billionaire wealth from the previous year.

What is Bitcoin?

Bitcoin is one of the best-known and most popular types of cryptocurrency, based on a free-market ideology.

Satoshi Nakamoto invented Bitcoin in 2009, although it remains unknown whether this pseudonym represents a person or a group of people. The digital currency is mostly seen as an investment and has been described by some as an ‘economic bubble’.

What does this Bitcoin crash mean?

Those who have invested in Bitcoin may face financial losses due to the current crypto crash. The Finance Magnates website explains: “As of today, Bitcoin (BTC) has fallen over 4.5 per cent in the past 24 hours, reaching its lowest level since late November at under $91,000 (£71,000), according to CoinMarketCap data.

“This drop mirrors a broader crypto market decline, with the total market capitalisation shedding 8 per cent, sliding from over $3.31trillion (£2.62tn) to approximately $3.09trillion (£2.44tn).”

Trump’s recent trade decisions are thought to be a main cause for the crash, as the US President announced a 30-day pause on new trade duties targeting Mexico and Canada just hours before sweeping tariffs were set to take effect, CNN reported.

If Bitcoin were to lose all of its value at once, massive financial losses would be seen among individual investors, various companies and on the global cryptocurrency market.