A sudden price collapse has seen bitcoin fall to its lowest level since November, triggering a broader downturn that has wiped nearly half a trillion dollars from the crypto market in recent days.
The world’s leading cryptocurrency fell below $89,000 on Tuesday, just a month after hitting an all-time high above $108,000. The peak coincided with the inauguration of Donald Trump, with the incoming US leader promising to be the first ever “bitcoin president”.
The latest downturn has also been partly attributed to President Trump, as he is yet to fulfil any of his major pledges after nearly a month in office.
“While the new Trump administration in the US has been vocal in its pro-crypto stance, the industry is still waiting for this to manifest in a tangible way in the form of measures such as a mooted Bitcoin Strategic Reserve,” Petr Kozyakov, co-founder and chief executive of the crypto exchange Mercuryo, told The Independent.
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The broader crypto market was also impacted by a hack of the Bybit platform on Friday, which has been described as the “biggest digital heist ever”. Hackers were able to steal around $1.5 billion (£1.2bn) after gaining control of an ethereum wallet operated by the Dubai-based crypto exchange.
Ethereum has dropped more than 15 per cent in value since the hack – more than double the relative losses of bitcoin – while other popular cryptocurrencies like Solana and XRP also suffered considerable losses.
Bitcoin has remained the most valuable cryptocurrency since its inception in 2009, with its finite supply drawing comparisons to safe-haven assets like precious metals. But despite this growing reputation, industry figures warn that the latest sell-off demonstrates that it is not yet considered a form of digital gold by investors.
“The cryptocurrency market is having a heliocentric reckoning as bitcoin slides below $89,000 amid a faltering US stock market,” said Mr Kozyakov.
“Rather than being at the centre of the financial universe, bitcoin’s place remains far out on the periphery as an ultra risk-on asset to be readily sold at the very hint of troubles ahead.”
