Bitcoin’s post-election surge has lost its footing, dragging the benchmark cryptocurrency below $90,000 on Tuesday—its lowest level since 18 November.
Over the course of the day, bitcoin fell by as much as 7.5 per cent before recouping some losses, ultimately trading around $86,481 by lunchtime in New York.
Global investors have turned away from riskier assets amid signs of a US economic slowdown. President Trump reignited concerns with pledges to impose a 25 per cent levy on imports from Canada and Mexico as early as March. The return of protectionist sentiment pushed yields on safe-haven US Treasuries to two-month lows, while business and consumer surveys suggest that rising borrowing costs and persistent inflation are eroding economic confidence.
Marcel Heinrichsmeier, a crypto assets analyst at DZ Bank, pinned the sell-off squarely on macroeconomic conditions: “Trump’s continued tariff announcements have sparked another burst of uncertainty, prompting a risk-off stance across markets.”
Bitcoin’s rally surged above $100,000 in December, driven partly by optimism that the new US administration would promote crypto-friendly measures, including the launch of a strategic bitcoin fund and looser regulation. Yet progress on such policies has been muted, providing little impetus for fresh investment flows.
Crypto sentiment took another hit last week following news of a massive hack at Bybit, the world’s second-largest exchange (behind Binance). Hackers stole approximately $1.5 billion worth of ether tokens, shaking investors’ faith in the security of digital assets.
“Tuesday’s sell-off likely reflects a delayed reaction to the Bybit hack,” said Joseph Edwards, head of research at Enigma Securities. Bitcoin has dropped nearly 8 per cent over the past week, while smaller altcoins like dogecoin have fallen by as much as 20 per cent.
Still, bitcoin remains 64 per cent higher year-on-year from its November 2022 level of $54,479. Whether the latest dip proves a temporary blip or the start of a deeper slide may depend on whether market nerves settle and crypto-friendly policies materialise.
Read more:
Why is crypto down? Bitcoin slips below $90,000 as market confidence falters