The cryptocurrency market is in the red. After weeks of hovering around $100,000, the price of Bitcoin has suddenly plummeted below $90,000. In the space of a week, the king Bitcoin has lost more than 5% of its value, widening the distance with its all-time high of $109,000.
Mirror to Bitcoin, the crypto market has suddenly collapsed. In the past 24 hours, $1.2 billion in liquidations have been recorded on cryptocurrency exchanges, according to data from CoinGlass. In addition, the overall market capitalization has recently fallen below the $3 trillion threshold.
Why Bitcoin is crashing
Bitcoin’s decline is mainly due to the tariffs imposed by Donald Trump. Back in the White House, the Republican president implemented a series of decisive measures to revive the American economy. In January, he notably decided to impose customs duties on products imported from Canada and Mexico to the United States. The announcement had weighed down all financial markets, including the cryptocurrency market. Bitcoin suffered a flash crash, falling below $92,000.
Last month, he had agreed to postpone the 25% customs duties on the United States' neighboring countries for a few weeks, which had relieved the financial markets. Now, Donald Trump is ready to implement the taxes on imports. The president confirmed that "the tariffs will be applied on time, according to the planned schedule", that is, from March 4, 2025.
Trump's promise has once again penalized the economy. As analyst Timo Emden of Emden Research explains, investors fear "a trade war between the United States and its main economic partners" and fear "that an escalation of the trade conflict will push inflation" around the world.
In this anxiety-provoking context, the Bitcoin price has followed the example of the stock markets by collapsing. In short, investors are withdrawing their assets from the riskiest assets, such as crypto, to focus on safe havens, such as gold and other precious metals. They are simply choosing the assets most likely to withstand an economic recession.
A Bitcoin back to $70,000?
It is not impossible that the recent hack of Bybit also contributes to the decline of Bitcoin and the crypto market. A few days ago, the crypto platform was indeed the victim of a major cyberattack. Orchestrated by the Lazarus hackers, the intrusion resulted in the theft of over $1 billion in cryptocurrencies. It is the largest hack in the history of cryptocurrencies. This incident may have undermined the confidence of some investors. As Bitfinex analysts indicate in a report, “the attack reveals persistent flaws in the security of crypto assets”. Although "Bybit has reassured its users of its solvency, this breach raises serious concerns about security protocols and the increasing sophistication of cyber threats."
As Bitcoin struggles to hold the $90,000 mark, some industry players are predicting a steeper decline in the near future. According to Arthur Hayes, co-founder of BitMEX, Bitcoin can be expected to fall to around $70,000.
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