Bitcoin has experienced a significant drop, falling below the $90,000 mark, which is its lowest point since mid-November. This downturn is part of a larger selloff affecting the cryptocurrency market and is driven by various economic concerns, including trade tariffs enacted by President Donald Trump, alongside challenges faced within the crypto sector. As of 7:51 a.m. New York time on Tuesday, Bitcoin plummeted by as much as 7.6%, trading around $89,042. Other prominent cryptocurrencies such as Ether, XRP, and Solana also suffered considerable declines, contributing to the most severe four-day downturn in the digital asset index since August.
### What’s Behind Bitcoin’s Decline Following Trump’s Election Rally?
Initially, Bitcoin surged in value following Trump’s election victory in November. However, since his inauguration in January, the cryptocurrency has seen a decline of approximately 20%. Analysts attribute this drop to increasing uncertainty stemming from Trump’s trade tariffs and geopolitical issues, which have unsettled investor sentiment. Adrian Przelozny, the CEO of Independent Reserve, noted, “The decrease in Bitcoin’s value appears to be associated with the broader macroeconomic uncertainty that has impacted various financial markets recently, tied to the tariffs introduced by President Trump.”
### Are Other Markets Feeling the Pressure?
The decline in Bitcoin reflects a broader trend of investors shifting away from high-risk assets as global markets respond to signs of economic slowdown. The Nasdaq 100 has recorded its steepest three-day decline in two months, prompting investors to seek safer investments like bonds, which has resulted in a consecutive drop in the 10-year Treasury yield over five sessions. Additionally, exchange-traded funds (ETFs), which significantly contributed to Bitcoin’s rise following the election, are now experiencing substantial outflows. On Monday, the iShares Bitcoin Trust ETF (IBIT) reported a rare outflow of $158 million, while $250 million was withdrawn from the Fidelity Wise Origin Bitcoin Fund. In total, Bitcoin ETFs listed in the U.S. suffered over $956 million in losses during February, marking the most challenging month for this asset class on record, according to data from Bloomberg Intelligence.
### What’s the Scale of Crypto Liquidations?
The ongoing selloff has led to extensive liquidations within the crypto derivatives market. According to CoinGlass, more than $1.34 billion in bullish crypto positions were eliminated in just a single day, exacerbating the downward trend.
### Did the Bybit Hack Influence Crypto Sentiment?
A significant factor contributing to the current decline in cryptocurrencies is a recent security breach at Bybit, one of the largest cryptocurrency exchanges globally. Hackers linked to North Korea reportedly stole around $1.5 billion worth of Ether last week and have begun laundering the stolen funds. This incident has raised serious concerns regarding the security of digital asset platforms and has reminded investors of past breaches and scams that led to considerable market declines.
### Are Memecoins Contributing to Market Anxiety?
Recent issues surrounding memecoins have further eroded market confidence. Cryptocurrencies associated with Donald Trump and his wife Melania have not fared well, with the Trump token plummeting by over 80% from its peak, according to CoinGecko data. Caroline Mauron, co-founder of Orbit Markets, remarked, “The Bybit hack is merely the latest episode in a series of troubling events, including dubious memecoin launches, that have rekindled negative memories for participants in the crypto market.”
### What Lies Ahead for Bitcoin and the Crypto Market?
With ongoing macroeconomic uncertainties, dwindling investor confidence, and specific challenges within the industry, Bitcoin’s future remains unpredictable. Analysts warn that further losses could occur if macroeconomic conditions do not stabilize and regulatory issues continue to loom. For the time being, traders and investors are closely monitoring forthcoming developments, particularly regarding U.S. economic policies and potential regulatory changes, to better understand the future direction of Bitcoin and the wider cryptocurrency market.
### FAQs:
Why is Bitcoin dropping below $90,000?
The decline in Bitcoin can be attributed to Trump’s trade tariffs, significant outflows from ETFs, and recent security breaches affecting the cryptocurrency landscape.
How much has Bitcoin depreciated since Trump’s inauguration?
Since Trump took office in January, Bitcoin has experienced a nearly 20% decrease, driven by economic uncertainties and instability in the market.
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