Bitcoin struggles amid global sell-off, on track for first October drop since 2018

Bitcoin is on track to record its first October loss in seven years, ending a streak that had long earned the month a “lucky” status among cryptocurrency traders. The world’s largest digital asset is poised for a decline of nearly 5 per cent this month, struggling to maintain momentum amid global market uncertainty and weakening investor risk appetite.

According to data compiled by Kaiko, a digital asset market intelligence firm, cryptocurrencies entered October in sync with gold and equities trading near record highs. However, sentiment shifted sharply as global economic and political uncertainties grew.

“As uncertainty hit people for the first time this year, they didn’t rotate back into Bitcoin en masse,” said Adam McCarthy, senior research analyst at Kaiko.

The sell-off intensified following US President Donald Trump’s announcement of a 100 per cent tariff on Chinese imports and potential export controls on key technologies, a move that triggered the largest crypto liquidation in history. Bitcoin fell as low as $104,782 during the 10–11 October period, just days after setting a record high above $126,000.

“That washout on the 10th reminded people that this asset class remains narrow,” McCarthy added. “It’s largely Bitcoin and Ether and even those can see 10 per cent drawdowns in 15 or 20 minutes.”

The volatile month has left investors uncertain about the near-term trajectory of global monetary policy. The US Federal Reserve has pushed back against market expectations of further rate cuts this year, while the ongoing government shutdown has blocked access to crucial economic data.

Adding to the unease, several leading financial figures have warned of overvaluation in equities. JPMorgan Chase CEO Jamie Dimon recently cautioned that the US stock market faces a heightened risk of a sharp correction within the next two years.

Despite October’s decline, Bitcoin remains up more than 16 per cent for the year, underpinned by growing acceptance of digital assets in major economies.

Cryptocurrencies have received a broader policy boost in 2025 as the Trump administration has moved to legitimise digital assets. A number of lawsuits against crypto exchanges have been dismissed, while regulators have been working to create dedicated frameworks for digital currencies, reflecting a more accommodative stance from Washington.

In India, cryptocurrency remains legal but tightly regulated. Under the Income Tax Act, 1961, cryptocurrencies are classified as Virtual Digital Assets (VDAs).

While they are not recognised as legal tender and cannot be used for payments, buying, selling, and holding digital assets through registered exchanges are permitted.

The government has enforced stringent tax measures, including a 30% tax on profits and a 1 per cent tax deducted at source (TDS) on each transaction. Regulators have also stepped up enforcement to ensure compliance with anti-money laundering (AML) and know-your-customer (KYC) norms, targeting both domestic and offshore exchanges.

A major legislative development, the proposed COINS Act 2025, aims to establish a comprehensive legal framework for cryptocurrencies. If passed, the act is being touted as the tool to introduce exchange licensing, investor protection mechanisms, and clearer taxation guidelines with steps expected to enhance legitimacy and boost investor confidence in India’s crypto ecosystem.

Bitcoin continues to dominate India’s digital asset landscape, accounting for about 7.2 per cent of total crypto investments. The cryptocurrency staged a strong rebound in the third quarter of 2025 and remains a preferred choice for Indian investors alongside Ethereum and Dogecoin.

Generation Z, aged between 18 and 25, now represents the largest investor segment, overtaking millennials. While metropolitan cities such as Mumbai, Delhi-NCR, Bengaluru, and Hyderabad lead in crypto participation, smaller Tier-2 and Tier-3 cities are rapidly catching up, signalling deeper penetration across the country.

India currently ranks first globally in crypto adoption, driven by its youthful population, expanding fintech infrastructure, and rising digital literacy. Bitcoin’s reputation as a “blue-chip” digital asset has made it a favoured option for long-term portfolio diversification and as a potential hedge against inflation.

Although October’s downturn has tempered enthusiasm among traders, analysts note that Bitcoin’s underlying fundamentals remain strong. Institutional interest, growing regulatory clarity, and mainstream acceptance continue to support its role as a key digital asset in global and Indian markets alike.

Despite the recent turbulence, Bitcoin’s resilience underscores its continued importance in the evolving landscape of digital finance, a space that remains as unpredictable as it is transformative.

With agency inputs