LONDON: Bitcoin fell below US$90,000 (S$120,359), its lowest since Nov 18, as concerns over US tariffs and last week’s US$1.5 billion Bybit ether wallet have shaken investors’ confidence.
On Tuesday (Feb 25), the world’s largest cryptocurrency by market value fell as much as 7.5 per cent before recovering slightly, but it remained down 5 per cent at US$89,314.
According to Reuters, investors have been “jittery” due to signs that the US economy’s “exceptionalism” may be fading while President Donald Trump continues to impose tariffs.
On Monday, the US President said he will go forward with the 25 per cent levy on imports from Canada and Mexico that will take effect in early March, adding to fears of trade tensions. In response, safe-haven assets such as US Treasury bonds have seen strong demand, pushing yields to their lowest level in two months.
DZ Bank crypto analyst Marcel Heinrichsmeier pointed to these macroeconomic factors as a key reason for bitcoin’s decline.
He noted that the continued tariff announcements and the protectionist stance of the Trump administration have raised uncertainty, leading to a selloff and fuelling fears of trade wars and inflation. He added that the Bybit hack and recent memecoin issues have generally worsened the mood in the crypto market.
Smaller altcoins have been hit harder compared to bitcoin’s 8 per cent retreat last week. Dogecoin, solana, and cardano tokens have all plummeted by about 20 per cent, according to CoinGecko. Ether, the second-largest cryptocurrency by market value, also dropped 9.5 per cent to US$2,386, its lowest since October.
Last week’s Bybit hack has remained a major concern for the market. Dubai-based Bybit, the world’s second-largest crypto exchange, reported that hackers had stolen US$1.5 billion worth of digital tokens. Blockchain research firm Elliptic called it the “single largest known theft of any kind in all time”, more than double the previous biggest crypto heist.
Joseph Edwards, head of research at Enigma Securities, said Tuesday’s selloff was likely a delayed response to the attack. While markets held up peculiarly well, he noted that “there tends to be a price to be paid further down the line”.
He said, “We’ve seen the classic thing, where a slight contraction in risk has caused a small cascading selloff within crypto markets specifically,” noting how market sentiment is fairly poor overall.
Another factor weighing on the market is the “absence of new bullish catalysts”, said Thomas Erdosi, head of product at CF Benchmarks.
Earlier expectations that the Trump administration would introduce policies favourable to cryptocurrency have not materialised.
At the same time, outflows from bitcoin-backed exchange-traded funds (ETFs) have accelerated. LSEG data showed that the largest ETFs experienced a net monthly outflow of around US$644 million, the highest since their January 2024 launch. /TISG
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