Bitcoin and Crypto Prices Crash as Elon Musk Issues Surprise Bitcoin Price Warning

The price of bitcoin has fallen sharply after Tesla billionaire Elon Musk warned that the cryptocurrency could be set for a sell-off in late March.

Despite a Wall Street investment bank making a massive bet on a bitcoin game-changer, the world's biggest cryptocurrency dropped to around $92,000 on Friday, down from a high of over $100,000 earlier this week.

Now, as the bitcoin and crypto market braces for an "imminent" Musk X bombshell, legendary crypto investor Arthur Hayes has predicted that the bitcoin price and crypto market will crash in late March.

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Federal Reserve chair Jerome Powell is predicted to help support the bitcoin price until the end of ... [+] the first quarter of 2025.

"Right on schedule, just like almost every other year, it will be time to sell in the late stages of the first quarter ... and wait for positive fiat liquidity conditions to re-emerge in the third quarter," wrote Hayes, a cofounder of bitcoin and crypto derivatives pioneer BitMex who went on to set up the Maelstrom investment fund, in a blog post.

The price of bitcoin and the crypto market rallies as dollar liquidity increases and falls as dollar liquidity declines, according to Hayes, who had earlier predicted the bitcoin price would collapse around incoming U.S. president Donald Trump's inauguration.

"I still believe that is a potential negative factor that could weigh upon the market in the short term, but against that, I must balance the dollar liquidity impulse," wrote Hayes. "Bitcoin, for now, jukes and jives as the pace of dollar emissions changes."

According to Hayes, the Treasury's general account will be close to being emptied towards the end of the first quarter, as the U.S. approaches the debt ceiling and the April 15 tax payment deadline.

The price of bitcoin has fallen this week as traders reassess the 2025 outlook for Federal Reserve interest rate cuts in light of the latest robust data showing the U.S. economy has remained strong.

The price of bitcoin has fallen back slightly but remains far higher than where it was a year ago.

"The Trump-dump that some had anticipated taking place after his inauguration as U.S. president has seemingly been fast-tracked as the cryptocurrency market dives deep into the red zone," said Petr Kozyakov, the chief executive of crypto payment platform Mercuryo, in emailed comments.

In December, Trump confirmed he plans to set up a U.S. bitcoin strategic reserve. "We're gonna do something great with crypto because we don’t want China, or anybody else … but others are embracing it, and we want to be ahead," Trump told CNBC.

"Markets are no longer euphoric over bitcoin entering a new age where even the U.S. will hold a strategic bitcoin reserve. Instead, bitcoin's role as an ultra risk-on, risk off asset has surfaced once again amid signs that the U.S. Federal Reserve may keep interest rates elevated for longer than previously expected."