Bitcoin has fallen below the $90,000 mark, reaching its lowest price point since mid-November, as the ongoing selloff in cryptocurrencies escalates. This downturn follows a series of economic worries, trade tariffs instituted by President Donald Trump, and challenges within the cryptocurrency sector. As of 7:51 a.m. New York time on Tuesday, Bitcoin experienced a drop of up to 7.6%, trading at approximately $89,042. Significant losses were also observed in other leading cryptocurrencies such as Ether, XRP, and Solana, contributing to the most severe four-day decline in the digital asset index since August.
What’s Behind Bitcoin’s Decline Following Trump’s Election Rally?
Initially, Bitcoin saw a surge in value after Trump’s election victory in November; however, it has since dropped around 20% since his inauguration in January. Market analysts attribute this decline to rising uncertainty stemming from Trump’s trade tariffs and global geopolitical tensions, which have unsettled investor confidence. Adrian Przelozny, CEO of the cryptocurrency exchange Independent Reserve, remarked that the decrease in Bitcoin prices is likely tied to the broader macroeconomic uncertainty affecting financial markets in recent days, closely linked to the various tariffs announced by President Trump.
Are Other Markets Feeling the Pressure?
The downturn in Bitcoin reflects a wider trend of moving away from high-risk assets, as global markets respond to signs of economic slowdown. The Nasdaq 100 has recorded its most significant three-day drop in two months, prompting investors to shift their focus towards safer investments like bonds. As a result, the yield on the 10-year Treasury has fallen for five consecutive sessions. Additionally, exchange-traded funds (ETFs), which significantly contributed to Bitcoin’s rally post-election, are experiencing substantial outflows. On Monday alone, the iShares Bitcoin Trust ETF (IBIT) reported an unusual $158 million in outflows, while the Fidelity Wise Origin Bitcoin Fund saw $250 million withdrawn. In total, U.S.-listed Bitcoin ETFs experienced losses exceeding $956 million in February, marking the worst month on record for this category according to data from Bloomberg Intelligence.
What Is the Scale of Crypto Liquidation?
This selloff has led to massive liquidations in the crypto derivatives market. According to data from CoinGlass, more than $1.34 billion in bullish crypto positions were liquidated within a single day, further exacerbating the market downturn.
Did the Bybit Hack Influence Crypto Market Sentiment?
A significant factor contributing to the current slump in cryptocurrency values is the recent security breach at Bybit, one of the largest cryptocurrency exchanges globally. Hackers, suspected to have ties to North Korea, stole roughly $1.5 billion in Ether last week and have begun laundering the stolen funds. This incident has raised alarms regarding the security of digital asset platforms, evoking memories of past hacks and scams that resulted in severe market declines.
Are Memecoins Contributing to Market Concerns?
Recent issues surrounding memecoins have further undermined market confidence. Cryptocurrencies associated with Donald Trump and his wife Melania have underperformed, with the Trump token experiencing a staggering drop of over 80% since its peak, according to CoinGecko data. Caroline Mauron, co-founder of Orbit Markets, noted, "The Bybit hack is just the latest in a series of events, including dubious memecoin launches, that have resurfaced troubling memories for participants in the crypto market."
What Lies Ahead for Bitcoin and the Crypto Market?
Given the prevailing macroeconomic uncertainty, declining investor confidence, and industry-specific challenges, the future of Bitcoin remains uncertain. Analysts indicate that Bitcoin may face further declines if macroeconomic conditions do not improve and regulatory concerns continue to loom. At present, traders and investors are meticulously monitoring forthcoming developments, including U.S. economic policies and potential regulatory actions, to determine the future trajectory of Bitcoin and the overall cryptocurrency market.
FAQs:
Why is Bitcoin falling below $90,000?
The decline in Bitcoin’s value is attributed to trade tariffs imposed by Trump, significant outflows from ETFs, and recent security breaches within the cryptocurrency sector.
How much has Bitcoin lost since Trump’s inauguration?
Since Trump took office in January, Bitcoin has seen a nearly 20% decrease, driven by economic uncertainty and instability in the market.
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