Bitcoin fell to a six-week low on Tuesday, as renewed global trade tensions and a major cryptocurrency exchange rattled investor confidence and triggered a broad market sell-off.
The sell-off was triggered by U.S. President Donald Trump’s reaffirmation of tariff threats against Mexico and Canada, which reignited concerns over global trade disputes and risk appetite.
As of 01:22 ET (6:22 GMT), Bitcoin fell 4.6% to $91,555.2, its lowest level since January 13.
Trump’s tariff plans rattle crypto markets
Trump has reaffirmed his intention to impose tariffs on imports from Mexico and Canada, set to take effect on March 4.
Despite ongoing negotiations and efforts by both neighboring countries to enhance border security and curb fentanyl trafficking, the administration remains steadfast in its decision. This move has introduced significant uncertainty into global markets, including the cryptocurrency sector.
Investors are concerned that the impending tariffs could disrupt trade relations and economic stability, prompting a shift away from riskier assets like cryptocurrencies.
Analysts suggest that the tariffs could lead to increased inflation and weaker economic growth, factors that traditionally impact investor confidence in volatile markets such as cryptocurrencies.
While some view Bitcoin as a hedge against economic instability, the immediate reaction indicates a cautious approach from investors amid the current uncertainty.
Bybit security breach further erodes market confidence
Compounding the market's challenges, Dubai-based cryptocurrency exchange Bybit suffered a major security breach, with hackers stealing approximately $1.5 billion worth of Ethereum.
This incident stands as one of the largest in the history of digital currencies. The sophisticated phishing attack deceived Bybit executives into authorizing transfers to unauthorized wallets, leading to significant asset losses.
In response, Bybit has assured users of its solvency, securing loans to cover the losses and implementing enhanced security measures. Despite these efforts, the breach has intensified apprehensions regarding the safety of digital assets, contributing to the downward pressure on Bitcoin's price.
Crypto price today: altcoins plunge amid broader risk-off mood
Altcoins slumped on Tuesday, in line with Bitcoin and other global markets, as investors reduced their position in speculative assets.
World no.2 crypto Ether tumbled 8.7% to $2,493.15 on Tuesday.
World no. 3 crypto XRP dropped 9.3% to $2.261.
Solana plunged 12.5%, and Cardano fell 8.8%, while Polygon declined 8.1%.
Among meme tokens, Dogecoin slipped 9.3%, while $TRUMP slumped 14%.
