Bitcoin has recorded its largest monthly loss since June 2022, pushing it into a bear market as the euphoria over cryptocurrencies after Donald Trump’s election win faded.
The price of bitcoin fell by 17.5% in February, the biggest monthly drop since June 2022, and its 11th worst month in the last decade, as negative sentiment gripped financial markets.
The world’s largest crypto asset ended February at about $84,252 (£67,010), having hit a three-month low of about $78,273 during trading on Friday.
Bitcoin has now dropped more than 20% below the record high of $109,071 set in mid-January, which puts it into a technical bear market.
Bitcoin weakened amid rising volatility in the financial markets, blamed on fears of a global trade war as Donald Trump vowed to impose new tariffs on imports from Canada, Mexico and China this week.
Having been driven upward by the “Trump trade” that fuelled markets after last November’s election, crypto stumbled as stocks on Wall Street, and the US dollar, also weakened during February.
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Cryptocurrencies surged after Trump’s election win, driven by speculation that the White House would take a pro-crypto approach, and could create a bitcoin strategic reserve.
However, that optimism has faded, as traders wait for a clear pro-crypto regulatory framework from the Trump administration. Sentiment was also hurt by a cyber-attack on the Bybit exchange in which $1.5bn of digital assets were stolen in February.
Susannah Streeter, the head of money and markets at Hargreaves Lansdown, said the crypto market continued to be battered by a wave of negative sentiment.
“The bears have been prowling around the crypto market, with crypto dropping 20% from its recent peak.”
Streeter added: “Donald Trump’s aggressive trade approach has sparked concerns with investors hurtling away from riskier assets, and the huge hack of the Bybit exchange in Dubai has also rattled sentiment. Without any firm moves from Trump to show his support for the crypto sector, nervousness looks set to continue.”
Bitcoin has recovered from sharp monthly falls in the past. In June 2022, its worst month, it dropped 41% from $31,700 to $18,700, before jumping by 26% in July.
