As the largest cryptocurrency by market capitalization, Bitcoin fell below $90,000, reaching its lowest point since November, with a drop of up to 7.5% at one stage. This marked its largest daily decrease since the global market sell-off in early August, which also affected stocks and bonds.
At the close of trading, Bitcoin was down 6.2% for the day, priced at $22,338. Global investors have been increasingly anxious amid indications that the perceived strength of the U.S. economy may be waning, particularly as President Donald Trump prepares to implement tariffs.
On Monday, Trump reaffirmed his intention to impose a 25% tariff on imports from Canada and Mexico, scheduled to take effect in early March.
Crypto investors had anticipated a further increase in Bitcoin's value, which had surpassed $100,000 in December, fueled by hopes that the Trump administration would support initiatives such as a strategic Bitcoin fund and ease regulatory constraints.
However, aside from an initial wave of appointments of crypto-friendly officials following his inauguration in January, there has been a lack of substantial news for investors to act upon.
"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," stated Thomas Erdosi, head of product at CF Benchmarks.
Moreover, there has been a trend of investors withdrawing funds from Bitcoin-backed exchange-traded funds. Data from LSEG indicates that the largest ETFs are projected to experience a net monthly outflow of approximately $644 million, the highest since their inception in January 2024.
Given the already fragile sentiment surrounding risk assets like cryptocurrencies and stocks, the announcement from Bybit regarding the theft of digital tokens valued at around $1.5 billion added to the prevailing negativity.
Bybit's CEO, Ben Zhou, reported that the cryptocurrency was taken from a "cold wallet," which is typically an offline digital wallet considered to be more secure, specifically designated for ether tokens.
According to blockchain research firm Elliptic, this breach surpasses the previous largest crypto theft by more than double and is likely the most significant theft of any kind in history.
Based in Dubai, Bybit ranks as the second-largest cryptocurrency exchange globally, following Binance.
Ether, the second-largest cryptocurrency by market capitalization, experienced a decline of 9.5%, trading at $2,386, marking its lowest point since October.
In the past week, bitcoin has seen a nearly 8% decrease in value, while smaller altcoins have suffered even greater losses. Memecoin dogecoin, along with tokens from the Solana and Cardano networks, have all fallen by approximately 20%, as reported by Coingecko.