Mar 4, 2026
Anyone who bought bitcoin near its peak is now watching a significant chunk of their investment disappear — and for those who went all in, the damage runs deep.
After hitting an all-time high above C$175,000 last fall, bitcoin has shed nearly half its value, recently trading around C$95,000 and briefly dipping even lower. That puts it back to levels not seen since before the U.S. presidential election — erasing more than a year of gains in only a few months, according to CNBC (1). Prices have stabilized somewhat, but the scale of the reversal has shaken even the most seasoned crypto holders.
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What’s unusual about this downturn isn’t the size of the drop, it’s the timing. Many investors expected a crypto-friendly White House to keep prices stable. Instead, bitcoin has behaved exactly the way its critics always warned: when the broader market sells off, bitcoin does as well (2).
The “digital gold” narrative — the idea that bitcoin holds value when everything else falls — has taken a serious beating this cycle.
What’s driving the crash
No single catalyst caused the drop, but several forces hit at the same time.
First, many investors had borrowed money to buy bitcoin during last year’s rally, betting that prices would continue their upward trajectory. When prices started falling instead, those investors were forced to sell quickly to cover their loans, which pushed prices further down and triggered more forced sales in a cyclical downward spiral.
Then bitcoin started moving in tandem with tech stocks. When big tech companies fell this year amid concerns about artificial intelligence (AI) spending and valuations, bitcoin fell with them — the opposite of what “digital gold” is supposed to do.
Finally, people got scared. When uncertainty rises, investors tend to pull money out of anything risky and move it to safer assets like gold or government bonds. Bitcoin, whatever its long-term advocates believe, is still treated as a high-risk bet when fear takes over.
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The real danger: Going all in
For investors who put a small slice of their savings into crypto alongside other investments, this crash may sting, but isn’t a complete disaster. For those who bet everything — or worse, borrowed against their holdings — it’s an entirely different situation.
A recent MarketWatch investigation profiled investors who took out loans against their bitcoin, convinced the rally would continue (3). One investor summed up a position many others share: “My retirement is completely in bitcoin.” She had invested in Strategy, a company that holds large amounts of bitcoin as its core business. She also had taken out a loan using her bitcoin as security. If the price falls far enough, the lender automatically sells the bitcoin to recover their money, whether she wants to sell or not.
When that happens to enough holders at once, the flood of forced selling pushes prices further down for every bitcoin holder, not only the ones who had borrowed.
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There’s an additional layer of risk specifically for Canadians. If you hold bitcoin in a regular investment account — not a Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP) — the Canada Revenue Agency (CRA) considers any sale a taxable transaction (4).
That means if you bought bitcoin at a lower price and are forced to sell now, even at a loss compared to the peak, you may still owe tax if you still have a gain relative to your original purchase price. In a worst-case scenario, you sell off at a terrible time, lock in a loss from the peak and still get a tax bill.
What financial planners are saying
The crash has reinforced what many advisers have been arguing for years: crypto has no reliable role in a financial plan built around predictable outcomes.
“It’s very hard to understand the role that bitcoin or crypto has in a financial plan.” Mark Lotocky, a financial planner at the Dixon Davis Group in Victoria, told The Globe and Mail (5). “You can’t predict it. And as a financial planner first, I like that predictability.”
Lotocky outlined the kind of straightforward math that gets disrupted when an unpredictable asset enters the picture: clear savings targets, known rates of return, a retirement income goal — none of which bitcoin can reliably support.
Matthew Learning, lead planner at Mountainview Financial Planning in Vancouver, made a point worth noting for investors who think they have no bitcoin exposure at all: many large companies now own bitcoin or other cryptocurrencies as part of their business (6). If you own stocks or stock-based funds, you may already have indirect exposure to crypto’s price swings without realizing it.
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Most advisors who recommend crypto suggest keeping it to between 2% and 4% of everything you’ve invested — small enough that a 50% drop is painful but not devastating to your financial plan (7). The more you put into bitcoin, the less room you have for stable and predictable investments.
Read more: The ultra-rich are bailing on volatile stocks right now — these 4 shockproof assets are their new safe havens
How to hold bitcoin more carefully
For investors who still want to own some bitcoin, Canada has a structure worth knowing more about.
Canada launched the world’s first bitcoin exchange-traded fund (ETF) in February 2021 — the Purpose Bitcoin ETF (BTCC) on the Toronto Stock Exchange (TSX), approved by the Ontario Securities Commission years before the U.S. followed suit (8). Today, Canadian investors have several TSX-listed options including the CI Galaxy Bitcoin ETF (BTCX) and the Fidelity Advantage Bitcoin ETF (FBTC), among others (9).
The key benefit over buying bitcoin directly is that these ETFs can be held inside a TFSA or RRSP, which direct crypto purchases can’t (10). Gains inside a TFSA are entirely tax-free: you pay nothing when you sell, no matter how much it’s grown. Gains inside an RRSP aren’t taxed until you withdraw the money in retirement, when your income — and your tax rate — is likely to be lower. In both cases, you also avoid the complexity of managing private wallets and the security risks associated with holding crypto yourself.
Buying bitcoin directly through a crypto exchange remains an option for those who want full control, but places all the responsibility for security and storage on you, and any gains in a regular account will be taxable.
Regardless of how you access it, the same rules apply: avoid meme coins, which are frequently linked to scams and hype-driven collapses (11), never invest money you can’t afford to lose and don’t let crypto substitute for the foundational parts of a solid financial plan — an emergency fund, a mix of stable investments and retirement savings you can actually count on.
-With files from Melanie Huddart
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
CNBC (1); CNN (2); MarketWatch (3); Government of Canada (4); The Globe and Mail (5, 6); Morgan Stanley (7); GlobeNewswire (8); Forbes (9, 10); Assure Defi (11); FP Canada (12)
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Emma Caplan-Fisher has over a decade of experience writing and editing various content types and topics, including finance, business & tech, real estate & design, lifestyle, and health & wellness. Emma’s work has been featured in Real Estate Magazine, Cottage Life, Bob Vila, the Vancouver Real Estate Podcast, the Chicago Tribune, Narcity Media, Healthline, and other media outlets. She holds a Certificate in Editing from Simon Fraser University.
