Bitcoin hit its lowest level since November and suffered its biggest weekly drop in more than two years, weighed down by a sell-off in tech stocks as concerns over U.S. crypto policy and a $1.5 billion cyberattack dampened industry sentiment.
The world's largest cryptocurrency fell 7% on Friday to $78,273, its lowest since Nov. 10, and is heading for its fifth straight day in the red. For the week, it has fallen 16%, its biggest weekly drop since the collapse of crypto exchange FTX in November 2022. The crypto market as a whole has lost nearly half a trillion dollars in just one week, according to Coingecko.
"Inflationary pressures, a deteriorating growth outlook, and Trump's ongoing tariffs have left Bitcoin traders unhappy," said Matt Simpson, senior market analyst at City Index. Bitcoin often moves in tandem with riskier assets such as tech stocks, and the Nasdaq, which is loaded with major tech stocks, is currently at its lowest level since November. Investors are increasingly concerned that the US economic monopoly may be waning, coupled with Trump’s new tariffs that could increase global inflation and slow economic growth.
Bitcoin had previously hit nearly $110,000 in mid-January on hopes that the Trump administration would champion a Bitcoin strategic fund and loosen regulations on the crypto industry. However, apart from a few pro-crypto appointments, there have been few concrete policy announcements. According to Joshua Chu of the Hong Kong Web3 Association, “the fall in Bitcoin prices suggests that the positive sentiment from the crypto-friendly administration and its high-profile support is fading.” Ether, the second-largest cryptocurrency, also fell 6% to $2,149.38, its lowest level since January 2024.
In addition, Bitcoin exchange-traded funds (ETFs) in the US saw $2.27 billion in outflows this week. According to analysts at Bank of America, Bitcoin’s failure to break the $97,000 average daily price since November is an early sign that the “crypto bubble is bursting.”
Meanwhile, the crypto world was also shaken by a cyberattack on Bybit, the second-largest exchange after Binance, which saw the loss of $1.5 billion worth of Ether in what is considered the largest crypto heist in history. The fall in Bitcoin prices also weighed on crypto-related stocks, with Coinbase Global and Strategy each down 2.3%.
