Bitcoin and Ether Plunge During Crypto Sell-Off
Bitcoin and Ether tumbled to multi-month lows on Tuesday as a wave of selling hit the cryptocurrency market. The drop followed a mix of global economic uncertainty and the fallout from a $1.5 billion hack on crypto exchange Bybit. Bitcoin slipped below $90,000 for the first time since November, sinking as much as 6% to $88,245. Ether fell even further, dropping up to 11% to reach $2,333, its lowest price since October.
What caused the sell-off?
The broader market sell-off was fueled by trade tensions sparked by U.S. President Donald Trump's implementation of tariffs on Mexico and Canada. His administration is set to implement the tariffs on March 4th, despite ongoing negotiations. The announcement of the tariffs has rattled investors, adding to concerns about rising inflation and weakening economic growth.
In addition to economic concerns, the cryptocurrency sector has been dealing with several industry-specific setbacks. The Bybit hack, one of the largest in crypto history, saw hackers steal approximately $1.5 billion worth of Ether. Analysts believe the attack was linked to North Korean hacking groups, which have been rapidly laundering the stolen funds. The breach has renewed fears about the security of digital asset platforms, further dampening market sentiment.
The exchange has secured loans to cover losses and announced additional security measures to prevent future attacks. However, trust in the platform has taken a hit, and the incident has reminded investors of the lingering risks in the crypto industry.
The crypto derivatives market also took a hit, with more than $1.34 billion in long positions liquidated over a 24-hour period, according to CoinGlass. Altcoins followed Bitcoin’s lead, with XRP, Solana, and Cardano all seeing double-digit percentage losses. Dogecoin and the $TRUMP token also dropped sharply, with the latter falling nearly 12%.
Bitcoin’s recent decline marks a sharp reversal from the rally that followed Trump’s election in November. Since his inauguration in January, Bitcoin has lost nearly 20% of its value, with investor confidence shaken by geopolitical tensions and Trump’s unpredictable economic policies. “Many traders had hoped Trump’s stance would be a boost for crypto, but his tariff threats and policy decisions have added uncertainty,” said Caroline Mauron, co-founder of Orbit Markets.
The collapse of the $TRUMP token, which has fallen more than 80% since its peak, has also raised doubts about the former president’s influence on the crypto market. Memecoin investors, once hopeful about Trump’s pro-crypto stance, have been left disappointed. His wife Melania’s token launch also failed to gain traction, adding to the skepticism.
Some analysts see Bitcoin’s dip as a temporary setback rather than a long-term trend. Historically, Bitcoin has recovered from major sell-offs, often rebounding stronger. Others, however, caution that continued uncertainty over trade policies and security concerns could keep prices under pressure for the foreseeable future.
For now, crypto investors remain on edge, watching for any signs of stabilization. The combination of macroeconomic turmoil and industry setbacks has created a challenging environment for digital assets. Until confidence returns, the market may continue to struggle with volatility.
