Bitcoin (CRYPTO: BTC) is back below US$77,000.
Two ASX-listed funds track the cryptocurrency directly. Both have lost roughly 40% of their value over twelve months.
The question now is whether this opportunity makes Bitcoin a bargain or a falling knife.
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Why Bitcoin fell back below US$77,000
The trigger was a speech from Federal Reserve chair Kevin Warsh, who used his Jackson Hole address on 28 August to sharpen his language on inflation.
Inflation is running above our 2 percent target. So the Fed's predominant focus right now should be on prices.
Roughly US$478 million of leveraged positions were liquidated in the hours that followed.
Rate cuts were the fuel behind the 2025 rally, and traders are now pricing in the possibility of future rate hikes.
The scale of the drawdown
Bitcoin reached an all-time high of US$126,210 on 6 October 2025.
The cryptocurrency then fell to roughly US$60,000 by early February this year.
This represents a decline of 52% from peak to trough.
August was actually the best month of 2026 for the asset before Jackson Hole undid a good chunk of it.
As a result of all of this, anyone buying at today's level is buying something still nearly 40% below its record.
How ASX investors can own Bitcoin
Two ETFs listed on the ASX give investors unique access and exposure to the cryptocurrency.
The VanEck Bitcoin ETF (ASX: VBTC) listed in June 2024 and now holds around $245 million in net assets.
Its units have traded between $16.90 and $38.40 over the past year.
The DigitalX Bitcoin ETF (ASX: BTXX) tracks the CME CF Bitcoin Reference Rate and has ranged between $18.37 and $42.50.
VanEck has also cut the fee on its fund as competition has built up.
Neither product pays an income, which is important if you are used to holding assets that at least generate something while you wait.
Furthermore, both are priced in Australian dollars, so the currency adds a second variable to an already volatile position.
The digital gold argument is under strain
Here is the part that should trouble Bitcoin believers most.
At the time of writing, gold has risen 1.3% to US$4,386 an ounce and keeps setting fresh records.
While gold rises, Bitcoin has continued to fall.
Indeed, Bitcoin tends to sell off when real yields rise and rallies when money is cheap. This is the opposite of what a hedge is supposed to do.
What would have to change
Two things could turn this around quickly.
The first is any softening in the Federal Reserve's inflation language, because the entire move traces back to rate expectations.
The second is a reversal in exchange-traded fund flows, since redemptions force real selling into the spot market.
Neither is visible yet, and the September quarter has been unkind to almost every long-duration asset.
Foolish takeaway
Bitcoin below US$77,000 is cheaper than it was, and cheaper is never the same thing as safe.
I would treat Bitcoin as a small satellite holding instead of a core position.
The two ASX funds solve the custody problem neatly, and that convenience is worth something to Australian investors.
What they cannot solve is the volatility of the underlying asset.
