By Alun John and Amanda Cooper
LONDON (Reuters) -Bitcoin hit its lowest in over three months on Tuesday, as nerves in markets over U.S. tariffs reinforced the blow to crypto investor confidence from last week’s $1.5 billion hack of ether from the Bybit exchange.
Bitcoin, the world’s largest cryptocurrency by market value, broke below $90,000 to its lowest since November 18, falling by as much as 7.5% at one point. It was last down 5% on the day at $89,314.
Global investors have been jittery of late on signs the so-called exceptionalism of the U.S. economy might be fading, while President Donald Trump prepares to impose tariffs.
Trump indicated on Monday his plans to slap a 25% levy on imports from Canada and Mexico from early March remain on schedule, and in a sign of the unease, safe-haven U.S. Treasury prices have rallied sharply, sending yields to two-month lows.
“The macroeconomic situation has been the main reason for the price decline in the last few hours,” said Marcel Heinrichsmeier, crypto assets analyst at DZ Bank.
“The continued tariff announcements and the general protectionist stance of the Trump administration once again led to uncertainty and a risk-off move, fuelling fears of a resurgence of trade wars and inflation.”
Though, he added, “The Bybit hack and the memecoin turmoil of the past few weeks have contributed to a generally worse mood in the crypto market than at the beginning of the year.”
While bitcoin has lost nearly 8% in value in the last week, smaller altcoins have been hit even harder. Memecoin dogecoin and the tokens for the solana and cardano networks have all dropped around 20%, according to CoinGecko.
DELAYED REACTION
Dubai-headquartered Bybit, the world’s second-largest exchange behind Binance, said last week hackers had stolen digital tokens worth around $1.5 billion.
Blockchain research firm Elliptic said the hack was more than double the last-biggest crypto heist and “is almost certainly the single largest known theft of any kind in all time.”
Ether, the second-largest cryptocurrency by market value, was down 9.5% at $2,386, around its lowest since October.
Joseph Edwards, head of research at Enigma Securities, said Tuesday’s selloff seemed to be “a bit of a delayed reaction from the Bybit hack.”
“Markets held up peculiarly well in response to what was expected to be a significant destabilising event (as any major hack tends to), but there tends to be a price to be paid further down the line when that happens.”
“Sentiment around the markets is just fairly poor overall, and we’ve seen the classic thing, where a slight contraction in risk has caused a small cascading selloff within crypto markets specifically.”
Part of the reason for the shift in sentiment is that policy changes in the U.S. have not lived up to expectations.
A few months ago, optimism that the Trump administration would champion initiatives like a strategic bitcoin fund and loosen regulation left investors primed for another leg higher in the bitcoin price, which topped $100,000 in December.
But beyond an initial flurry of appointments of crypto-friendly officials when he took office in January, there has been little concrete news for investors to trade on.
“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,” Thomas Erdosi, head of product at CF Benchmarks, said.
In addition, investors have been pulling money out of bitcoin-backed exchange-traded funds. LSEG data shows the largest ETFs are set for a net monthly outflow of around $644 million, the largest since their launch back in January 2024.
(Additional reporting by Samuel Indyk and Tom Wilson; Editing by Christina Fincher and Ros Russell)
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