Bitcoin tumbled below the $90,000 mark on Tuesday, hitting its lowest level since November, as the fallout from a $1.5 billion Bybit hack and renewed concerns over U.S. tariffs rattled investor confidence.
The world’s largest cryptocurrency fell as much as 7.5% on the day, trading at $87,169.76. The steep decline comes amid a broader selloff in digital assets, with Ether, the second-largest cryptocurrency by market value, slipping 8.46% to $2,414.29—its lowest level since October.
Hack, Tariff uncertainty shake crypto markets
The sharp downturn follows last week’s cyberattack on Bybit, the world’s second-largest cryptocurrency exchange, which resulted in the theft of digital tokens worth approximately $1.5 billion. According to blockchain analytics firm Elliptic, this is "almost certainly the single largest known theft of any kind in all time."
In addition to the security breach, investor sentiment has been dampened by growing concerns over U.S. economic policies. Former President Donald Trump indicated on Monday that he still plans to impose a 25% tariff on imports from Canada and Mexico, starting in early March. The uncertainty surrounding these tariffs has driven investors toward safe-haven assets, with U.S. Treasury yields plunging to two-month lows.
"The macroeconomic situation has been the main driver behind Bitcoin’s price decline in the last few hours," said Marcel Heinrichsmeier, a crypto assets analyst at DZ Bank. "The Bybit hack and the memecoin turmoil of the past few weeks have contributed to a generally weaker sentiment in the crypto market compared to earlier this year."
Altcoins suffer steeper losses
While Bitcoin has lost nearly 8% in the past week, smaller cryptocurrencies have faced even steeper declines. Memecoin Dogecoin and tokens from the Solana and Cardano networks have all plunged by approximately 20%, according to data from CoinGecko.
"The brutal sell-off happening in crypto is not unexpected considering we’ve just seen the biggest hack in our history," said Charles Wayn, co-founder of decentralized blockchain-based platform Galxe. "This has been compounded by further fears over global tariffs."
Delayed Market Reaction to Bybit Breach
While the Bybit hack was disclosed last week, Tuesday’s price drop appears to be a delayed market reaction, according to analysts.
"Markets held up peculiarly well in response to what was expected to be a significant destabilizing event," said Joseph Edwards, head of research at Enigma Securities. "But there tends to be a price to be paid further down the line. We’ve seen the classic situation where a slight contraction in risk appetite has triggered a cascading sell-off within crypto markets."
Bybit CEO Ben Zhou confirmed that the stolen funds were taken from a "cold wallet," an offline digital wallet designed to be more secure. The breach, which mainly impacted Ether tokens, has shaken confidence in crypto security measures, prompting some investors to exit the market.
ETF outflows add to selling pressure
Adding to the bearish sentiment, Bitcoin-backed exchange-traded funds (ETFs) have seen significant outflows in recent weeks. Data from LSEG indicates that the largest crypto ETFs are on track for a net monthly withdrawal of approximately $644 million, the largest since their launch in January 2024.
"A few months ago, optimism that the administration would champion a strategic Bitcoin fund and loosen regulation left investors primed for another jump in Bitcoin," said Thomas Erdosi, head of product at CF Benchmarks. "But beyond a flurry of appointments of crypto-friendly officials earlier this year, there has been little concrete progress on regulatory clarity or new catalysts."
Market outlook: Will Bitcoin rebound?
Despite the current selloff, some analysts believe Bitcoin could recover if macroeconomic conditions improve and regulatory clarity emerges. However, short-term volatility is likely to persist.
“The absence of new bullish catalysts—such as progress on crypto-friendly regulation or the approval of additional cryptocurrency ETFs—has kept prices range-bound in recent weeks,” Erdosi added.
With Bitcoin slipping below key technical levels, traders will be closely watching upcoming economic data releases and policy announcements to gauge the next direction for the cryptocurrency market.
Bitcoin’s slide below $90,000 highlights the fragile state of the crypto market, as investors grapple with security concerns, regulatory uncertainty, and global economic shifts. While long-term believers in digital assets remain optimistic, the coming weeks will be crucial in determining whether Bitcoin can regain its bullish momentum or if further declines are on the horizon.
