Bitcoin experienced its largest daily drop since August, influenced by several negative factors impacting the cryptocurrency markets. The recent decline was driven by concerns over the potential impact of new U.S. tariffs on imports, disappointing results from Nvidia, and the major hack on the Bybit platform, which led to the theft of $1.5 billion worth of Ethereum.
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At one point, Bitcoin dropped by 7.5%, falling below the $90,000 mark, marking its lowest level since November. In the latest trading, it declined by 6.2%, reaching $22,338.
Investors are increasingly worried about a potential downturn in the U.S. economy, especially as President Donald Trump prepares to implement new tariffs. On Monday, Trump reaffirmed his plan to impose a 25% tariff on imports from Canada and Mexico starting in early March, adding further pressure on financial markets, including cryptocurrencies.
After Bitcoin surpassed the $100,000 threshold in December, many investors were betting on its continued rise, driven by expectations that the Trump administration would support projects like a Bitcoin strategic fund and ease cryptocurrency regulations. However, after initial appointments of pro-crypto officials in January, there have been few positive developments for investors to build upon.
Thomas Erdosi, Head of Products at CF Benchmarks, said: "The absence of new bullish catalysts — such as progress in pro-crypto legislation or approval of more Bitcoin ETFs — has kept prices largely stagnant in recent weeks."
Investors have started pulling funds from Bitcoin ETF products. LSEG data shows that the largest of these ETFs is on track for a net outflow of approximately $644 million this month, the biggest since its launch in January 2024.
As uncertainty grows in the crypto market and financial markets in general, Bybit's announcement last week about a major hack added further downward pressure on the market.
Bybit's CEO, Ben Zhou, confirmed that the stolen cryptocurrency was withdrawn from a "cold wallet," a type of offline storage that is usually considered more secure than online wallets. Blockchain research firm Elliptic described the hack as "larger than twice the size of the largest known cryptocurrency theft," emphasizing that "it could be the largest theft ever of any digital asset."
Bybit, headquartered in Dubai, is the second-largest cryptocurrency exchange globally, after Binance.
As the decline continues, Ethereum, the second-largest cryptocurrency, fell by 9.5% to $2,386, hitting its lowest point since October.
In just one week, Bitcoin has lost nearly 8% of its value, while smaller cryptocurrencies have experienced even steeper losses.
According to data from Coingecko, alternative coins like Dogecoin, Solana, and Cardano dropped by nearly 20%, reflecting the market's vulnerability to negative news.
