(Bloomberg) -- Bitcoin tumbled below $90,000 to hit the lowest level since mid-November, as the rally that followed Donald Trump’s election to the White House reverses amid a broader retreat from risky assets.
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Bitcoin dropped as much as 8.5%, the biggest intraday declined since August. The largest cryptocurrency by market value was down 7.6% to $86,805 at 11:20 a.m. in New York on Tuesday. Other cryptocurrencies also fell, with Ether, XRP and Solana were mostly down more for the session. An index tracking top digital tokens was on pace for its largest four-day drop since early August.
The recent turmoil in digital assets is a stark shift from the risk-on rally that drove crypto markets higher following Trump’s election in early November. Bitcoin has tumbled roughly 20% since his January inauguration, as Trump’s combative stance against allies and geopolitical rivals alike shakes investor confidence, and concerns about elevated inflation linger.
“The fall in Bitcoin prices is likely related to broader macro uncertainty that has hit most financial markets in the last couple of days and is linked to the various tariffs being announced by President Trump,” said Adrian Przelozny, chief executive of crypto exchange Independent Reserve.
Tumbling crypto prices mirror a broader retreat from risky assets that gained momentum late last week when a string of disappointing economic reports pushed the Nasdaq 100 to what is now its worst four-day drop since September. In turn, money has flowed into bond havens, pushing the 10-year Treasury yield down for five straight sessions.
Exchange-traded fund investors, whose hand-over-fist buying helped power the post-election crypto advance, have been stepping back. The iShares Bitcoin Trust ETF (ticker IBIT), the largest spot Bitcoin fund, shed $158 million on Monday in a rare outflow, while investors pulled nearly $250 million from the Fidelity Wise Origin Bitcoin Fund — the third-largest withdrawal among all ETFs. More than $956 million has exited from US-listed spot Bitcoin ETFs in February, the worst month on record for the category, Bloomberg Intelligence data show.
The bullish bets on crypto have seen hefty liquidations over the last two days with $815.8 million and $860 million respectively, according to data from Coinglass. Perpetual futures, which tends to be used by offshore investors due to its lack of availability in the US market, saw leveraged long positions drop.
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“Perp traders showed an appetite to add BTC longs, but longs have largely been punished as BTC pushed to new yearly lows amidst substantial long liquidations,” said Vetle Lunde, head of research at K33 Research. “Aggressive positioning from offshore traders has created an environment ripe for continued volatility.”
Memecoins, Giant Hack
Sentiment has also soured following a series of recent industry-specific setbacks, including the biggest-ever crypto hack targeting exchange Bybit and a memecoin scandal involving Argentina’s President Javier Milei. That helps explain why digital coins have underperformed other risk assets like technology stocks in recent weeks.
The Bybit hack, in particular, has added to fears about the safety of digital-asset platforms. Hackers which analysts say are linked to North Korea made off with about $1.5 billion of Ether in last week’s attack and have started quickly laundering the haul. Several researchers say the heist revealed a rising level of sophistication among North Korea’s army of hackers.
Memecoins launched by Trump and his wife Melania just before the inauguration have also performed poorly, undermining confidence in his pro-crypto policies. The Trump token has tumbled more than 80% since peaking almost immediately after he launched it, based on CoinGecko data.
“The Bybit hack was the latest in a string of events, such as questionable memecoin launches, that have brought back unhappy memories for crypto market participants,” said Caroline Mauron, co-founder of Orbit Markets, a provider of liquidity for crypto derivatives.
Shares of crypto-related companies were also lower. Coinbase Global Inc. fell for a seventh day, and is down 29% over the period. Strategy lost around 20% over three days and is now in the red this year. Bitcoin miner MARA Holdings Inc. was down almost 10%, and is off 25% since December.
--With assistance from Sidhartha Shukla, Katie Greifeld and Blaise Robinson.
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