Bitcoin has far surpassed its initial January 12 2009 value of $0.0041. In crypto lore this is dubbed “Bitcoin Pizza Day”, when two pizzas were purchased for 10,000 Bitcoin, the equivalent of about $1bn today, with bitcoin now trading at roughly $87,000 each.
That’s an impressive gain despite bitcoin’s recent significant losses, which are spooking crypto investors. It has lost 25% of its value over the past month, from a high of $114,000 on October 16.
Normally I would tell you to buy the dip and “hold on for dear life”, as they say in crypto culture. But I think this time, perhaps, hang on just a little longer to see exactly how much lower the dip goes. I think more painful losses are likely before the year closes out, due to a few market fundamentals.
Bitcoin has fallen in the past month largely because of a convergence of macroeconomic pressures, institutional sell-offs and leveraged-trade liquidations. Many investors seem to have cashed out after the October peak. These included sales of bitcoin by digital asset treasury reserve companies such as Strategy, which have seen their valuations plunge with the market volatility.
At the same time, fading hopes for a December rate cut by the US Federal Reserve have pushed down risk appetite, and a broader “risk-off” vibe shift in global markets has reduced demand for crypto and exacerbated heavy selling.
Recovery from bitcoin’s recent 30% drop will be harder than for previous sell-offs. Crypto adoption has slowed in some markets, showing signs of a liquidity crunch, and many investors now access bitcoin through exchange traded funds and indices.
This is not to say novice investors shouldn’t invest in bitcoin or other crypto assets. But the risk profile of crypto does not suit everyone. Extreme volatility of exhilarating highs and crushing lows has always been a feature of digital assets as they are highly dependent on market beliefs about the asset class. Nonetheless, crypto remains a route to diversification in a weird and unpredictable global economy.
In South Africa and the wider continent, the secular outlook for digital assets is one of continued growth. The Reserve Bank therefore said in its November 2025 financial stability review that regulatory oversight of crypto assets would increase, as it works with the Treasury to assess the cross-border implications.
Both the number of registered users and of crypto assets held by the three largest South African managers — Luno, VALR and OVEX — have increased. The total value of crypto assets held by the three rose from under R10bn at the start of 2023 to R25.3bn at the end of 2024. As at December 31 2024, Bitcoin continued to account for the largest share of domestic crypto asset holdings, followed by ripple, ethereum and solana.
The Bank said: “Due to their exclusively digital — and therefore borderless — nature, crypto assets can be used to circumvent the provisions of the exchange control regulations [of] 1961. On-chain analysis confirms that since January 1 2019 the top 10 domestically hosted bitcoin wallets have processed almost R63bn in outwards volume. Should more wallets be tracked and other popular crypto assets such as ethereum and ripple be added, the number is likely to be much higher.”
Whatever you think of crypto, it isn’t going away anytime soon, especially in Africa, where digital assets offset national fiat foreign exchange risk and as corporate behemoths such as Discovery and Super Group get in on the action. Globally, the asset class will be supported by pro-crypto initiatives introduced under US President Donald Trump.
• Dr Masie is a visiting senior fellow at the London School of Economics’ Firoz Lalji Institute for Africa.
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