Bitcoin Plummets Below $90K: Tariff Concerns Fuel Crypto Market Selloff

Image Credit: Reuters

Bitcoin dropped to a three-month low on Tuesday, driven by renewed global trade concerns and a significant breach at a major cryptocurrency exchange, which triggered a widespread market sell-off.

The sell-off was sparked by U.S. President Donald Trump’s reinforcement of tariff threats against Mexico and Canada, raising fears over escalating global trade tensions and dampening investor risk appetite.

At 03:15 ET (8:15 GMT), Bitcoin had fallen by approximately 6% to $89,843, marking its lowest point since mid-November.

Trump’s Tariff Plans Impact Crypto Markets

Trump reiterated his plan to impose tariffs on imports from Mexico and Canada, set to take effect on March 4. Despite ongoing negotiations aimed at improving border security and curbing fentanyl trafficking, the administration’s firm stance has created significant uncertainty in global markets, including the cryptocurrency sector.

The potential disruption of trade relations and broader economic instability is causing investors to shy away from riskier assets like cryptocurrencies. Analysts warn that these tariffs could lead to higher inflation and slower economic growth, both of which typically dampen investor sentiment in volatile markets like digital currencies.

Though Bitcoin is often seen as a hedge against economic instability, the immediate market response indicates a more cautious outlook as investors navigate the current uncertain environment.

Bybit Hack Intensifies Market Worries

Further shaking investor confidence, Dubai-based cryptocurrency exchange Bybit experienced a major security breach, where hackers stole approximately $1.5 billion worth of Ethereum. The attack, one of the largest in cryptocurrency history, was a sophisticated phishing scheme that tricked Bybit executives into authorizing unauthorized transfers.

Although Bybit has assured users that it remains solvent and has secured loans to cover the losses, the breach has heightened concerns about the safety of digital assets, putting additional downward pressure on Bitcoin’s price.

Altcoins Tumble Amid Broader Market Decline

Altcoins followed Bitcoin’s downturn on Tuesday, as investors pulled back from speculative assets.

• Ether, the second-largest cryptocurrency, dropped 12% to $2,388.32.
• XRP, the third-largest crypto, saw an 11% decline, falling to $2.20.
• Solana plunged 13%, Cardano fell 9.6%, and Polygon dropped 9%.

Meme tokens also struggled, with Dogecoin slipping 11% and $TRUMP dropping nearly 12%.

 

 

 

 

Paraphrasing text from "Investing.com" all rights reserved by the original author