Bitcoin has fallen below the $90,000 mark, reaching its lowest point since mid-November as the cryptocurrency market continues to experience significant selloffs. This downturn has been exacerbated by a combination of economic worries, tariffs introduced by President Donald Trump, and challenges within the crypto sector. As of 7:51 a.m. New York time on Tuesday, Bitcoin plummeted by as much as 7.6%, trading at approximately $89,042. Other prominent cryptocurrencies, including Ether, XRP, and Solana, have also faced notable declines, resulting in the most substantial four-day drop in the digital asset index since August.
What’s Causing Bitcoin’s Decline Post-Trump’s Election Rally?
Following Trump’s election victory in November, Bitcoin initially experienced a surge in value; however, it has since decreased by nearly 20% since his inauguration in January. Analysts attribute this decline to increasing uncertainty stemming from Trump’s trade tariffs and rising geopolitical tensions, which have undermined investor trust. Adrian Przelozny, CEO of the crypto exchange Independent Reserve, commented that the drop in Bitcoin prices is likely tied to broader macroeconomic uncertainties affecting various financial markets recently, particularly those related to the tariffs announced by President Trump.
Are Other Markets Feeling the Pressure?
The downturn in Bitcoin reflects a general shift away from high-risk investments, as global markets respond to signs of economic slowdowns. The Nasdaq 100 has seen its most significant three-day decline in two months, with investors shifting towards safer assets such as bonds. This movement has resulted in a consecutive decline in the 10-year Treasury yield over five sessions. Additionally, exchange-traded funds (ETFs), which played a crucial role in Bitcoin’s post-election rally, are experiencing substantial outflows. On Monday, the iShares Bitcoin Trust ETF (IBIT) reported a rare outflow of $158 million, while the Fidelity Wise Origin Bitcoin Fund saw withdrawals totaling $250 million. Overall, U.S.-listed Bitcoin ETFs have lost more than $956 million in February alone, marking a record low for the category, according to Bloomberg Intelligence.
What’s the Extent of Crypto Liquidations?
The recent selloff has prompted significant liquidations within the crypto derivatives market. According to CoinGlass, over $1.34 billion in bullish crypto positions were eliminated in just a single day, which has intensified the downward trend.
Did the Bybit Hack Influence Crypto Sentiment?
A major factor contributing to the ongoing decline in the crypto market is the recent cyberattack on Bybit, one of the largest cryptocurrency exchanges globally. Hackers associated with North Korea reportedly stole around $1.5 billion worth of Ether and have begun laundering the stolen funds. This breach has heightened concerns regarding the security of digital asset exchanges, triggering memories of past hacks and scams that led to considerable market declines.
Are Memecoins Compounding Market Concerns?
Recent issues surrounding memecoins have also contributed to declining confidence in the market. Cryptocurrencies associated with Donald Trump and his wife Melania have underperformed, with the Trump token plummeting over 80% from its peak, according to data from CoinGecko. Caroline Mauron, co-founder of Orbit Markets, noted that the Bybit hack, coupled with questionable launches of memecoins, has revived negative memories for participants in the crypto market.
What Lies Ahead for Bitcoin and the Crypto Market?
Given the current macroeconomic uncertainties, dwindling investor confidence, and specific industry challenges, the future for Bitcoin remains uncertain. Analysts warn that Bitcoin may continue to face losses if macroeconomic conditions do not improve and if regulatory issues persist. Traders and investors are now closely monitoring upcoming developments, including U.S. economic policies and potential regulatory actions, to determine the future trajectory of Bitcoin and the wider crypto market.
Frequently Asked Questions
Why is Bitcoin falling below $90,000?
Bitcoin is experiencing a decline due to trade tariffs imposed by Trump, substantial ETF outflows, and recent security breaches within the crypto industry.
How much has Bitcoin lost since Trump’s inauguration?
Since Trump took office in January, Bitcoin has dropped almost 20%, driven by economic uncertainty and market volatility.
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