Bitcoin Price Declines to Three-Week Low Following David Sacks' Departure

Bitcoin experienced a significant decline, reaching its lowest point in almost a month on Friday. This drop occurred concurrently with David Sacks announcing his resignation as President Donald Trump’s “AI and crypto czar”, which heightened concerns regarding future policy for digital assets.

Key Takeaways

Bitcoin's price fell to $65,720, nearing a four-week low, but later recovered slightly.
The broader cryptocurrency market witnessed a drop, with an estimated $500 million in crypto positions liquidated in just 24 hours.
David Sacks, appointed in December 2024, announced his departure after fulfilling his service limit as a special government employee.
His exit raises uncertainty about the White House's future direction on cryptocurrency regulations.
The current macroeconomic climate can influence Bitcoin's price movements, with traders predicting potential volatility.

Bitcoin price dips to 3‑week low after Sacks exit

Bitcoin's Price Decline and Market Reaction

Bitcoin fell to $65,720, marking its weakest level since March 2. The cryptocurrency eventually bounced back to around $65,804, resulting in a daily loss of over 4%, which contributed to a downturn in the wider crypto market. Data from derivatives tracker CoinGlass revealed that more than $500 million in crypto positions were liquidated within the last 24 hours, with almost 90% affecting long traders. This indicates that many traders with bullish positions were forced out of the market. Other cryptocurrencies were also affected: Ethereum (ETH) dropped around 4% to about $1,980, Solana (SOL) fell 5% to below $83, and BNB decreased by 3%, landing at roughly $608. Additionally, crypto-related stocks like MicroStrategy and BitMine Immersion Technologies reached one-month low points.

Impact of David Sacks' Resignation

The market downturn coincided with Sacks’ confirmation that he would be stepping down from his role as the White House's crypto czar, having utilized his maximum allowable service days as a special government employee. Sacks was appointed by Trump in December 2024 to shape regulations for artificial intelligence and cryptocurrency—two sectors deemed vital for America’s competitive edge. His role was seen as pivotal, with Trump stating that Sacks would help ensure the U.S. leads globally in these areas. During his time, Sacks often linked regulatory clarity to market stability, warning that ongoing uncertainty could deter investment in the industry.

While Sacks’ resignation does not signal a definitive shift away from cryptocurrency within the administration, it does create uncertainty regarding the White House's strategy on digital asset legislation. He plans to transition into a broader role as co-chair of the President’s Council of Advisors on Science and Technology, focusing on a wide-ranging technology strategy rather than the specifics of crypto regulations that had positioned him as a primary figure for the sector.

Current Market Conditions and Future Outlook

Despite Bitcoin's modest decline into the mid-$65,000s compared to past substantial downturns, it occurs amid a generally negative macroeconomic environment. Major U.S. stock indices, including the Nasdaq, S&P 500, and Dow Jones, all saw declines around the same time, influenced by rising oil prices and geopolitical tensions in the Middle East. Bitget CEO Gracy Chen noted that while Bitcoin is likely to endure high volatility in the near term, less leverage in the market suggests recent price adjustments resemble "positioning resets" rather than cascading liquidations seen in previous years.

Market participants are now eager to discover the extent to which a “policy premium” was priced into Bitcoin during Sacks' tenure. As Trump shifted from skeptical to supportive of cryptocurrency, Bitcoin’s rise to six-figure valuations occurred alongside Sacks’ influence on regulatory initiatives in Washington. Currently, prediction markets exhibit a divided outlook among traders, with roughly 64% of participants suggesting Bitcoin's next significant move may dip to $55,000 rather than rise to $84,000. This implies that without clear policy advocates like Sacks, market dynamics will depend significantly on broader economic factors rather than solely White House intentions.