Bitcoin was sitting at $79,905 just after 10am today (28 February), after plunging to $78,495 earlier this morning.
Bitcoin broke the $100,000 mark in December, driven by expectations of a crypto-friendly regulatory environment under Donald Trump’s incoming presidency.
But Trump’s tariff threats and a huge crypto hack have caused nervousness, with Bitcoin plummeting past the psychologically important $80,000 mark, and there is little in sight to prompt a significant reversal.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “The flight from crypto has intensified as global sentiment has turned sour. President Trump has ramped up his tariff threats, casting an ominous shadow over the global economy. Crypto euphoria is so highly [intertwined] with broad investor enthusiasm that when it’s dented there is nowhere to hide, with coins and tokens falling in tandem.”
Bitcoin has previously been heralded as a hedge against inflation, but it is now performing in the opposite fashion – falling sharply even though inflation expectations have ramped up in the US, due to the threat of higher duties on imports increasing consumer prices.
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Streeter added: “At this point, only an intervention of support from the US administration is likely to do the trick of stopping crypto rolling further away from the heady heights reached after Trump’s win.
“This was sparked by the promise that the US would turn into the crypto capital of the world, with pledges to set up a strategic Bitcoin reserve. Although the President signed an executive order in his first week of office, pledging to go light with regulation for crypto and blockchain technology, this has underwhelmed given the lack of detail for specific support. The main activity from the White House since his election was the launch of coins for himself and the First Lady, which rose in value and fell back down to earth in ‘pump and dump’ fashion, alienating rafts of crypto enthusiasts.
“While sharp falls in digital coins and tokens aren’t unusual, the losses this week have been super painful, especially for those who were lured in by the FOMO effect after Bitcoin hit $100,000. It’s a stark reminder not to speculate in this highly risky asset class with money you can’t afford to lose.’’
This month has seen crypto attraction for hackers and criminals come to the fore, with hackers stealing $1.5bn from crypto exchange ByBit in what has been dubbed the “biggest digital heist ever.”
The Dubai-based crypto platform said an attacker gained control of a wallet of Ethereum, one of the most popular digital currencies after Bitcoin, and transferred the contents to an unknown address.
