The leading cryptocurrency by market capitalization fell by as much as 7% on Friday, dropping to $78,273, its lowest level since November 10, and is on track for a fifth consecutive day of losses.
Over the past week, Bitcoin has plummeted 16%, marking its steepest weekly decline since the FTX crypto exchange's collapse in November 2022. The overall cryptocurrency market has seen a loss of nearly half a trillion dollars in just one week, according to Coingecko.
"Inflationary pressures, growth prospects are crumbling and Trump's tariffs are not going away. And with Trump's attention (on) anything except deregulating crypto, bitcoin traders are not happy," stated Matt Simpson, senior market analyst at City Index.
Bitcoin generally moves in tandem with tech stocks, which tend to rise when investors are optimistic about economic growth. The tech-heavy Nasdaq index is currently at its lowest level since November.
Concerns are growing that the unique strength of the U.S. economy may be waning, and investors are apprehensive about President Donald Trump's tariff policies, which have raised fears of increased global inflation and slower economic growth.
Investors have also reacted negatively to the results from AI leader Nvidia.
A SHIFTING LANDSCAPE
The landscape for Bitcoin is markedly different from mid-January, when it neared $110,000 amid hopes that the Trump administration would support a strategic Bitcoin fund and ease regulations.
However, aside from a series of appointments of crypto-friendly officials following Trump's inauguration, there has been little substantial news regarding policy developments for investors.
The recent decline in Bitcoin's price "indicates that the positive sentiment generated by a crypto-friendly administration and high-profile endorsements has reached its limit," remarked Joshua Chu, Co-Chair of the Hong Kong Web3 Association.
"It’s clear bitcoin is a risk asset, not the inflation hedge or digital gold it’s often touted to be."
Ether, the second-largest cryptocurrency by market capitalization, experienced a decline of 6%, trading at $2,149.38, marking its lowest point since January 2024.
The "TRUMP" memecoin, introduced by Trump during his inauguration, has seen a 50% decrease in value, while his wife's "MELANIA" token has plummeted by 90%.
Additionally, there has been a significant withdrawal of funds from bitcoin exchange-traded funds (ETFs).
Bitcoin ETFs listed in the U.S. have recorded outflows totaling $2.27 billion this week.
Analysts at Bank of America noted in a report on Friday that the average daily bitcoin price has struggled to surpass $97,000 since November, indicating the potential onset of the "bro bubble popping."
The recent excitement surrounding cryptocurrencies has largely been fueled by younger male influencers on social media and tech entrepreneurs, often referred to as "crypto bros."
The cryptocurrency market has been on edge following the announcement from Bybit, the world's second-largest exchange after Binance, regarding a hack that resulted in the theft of approximately $1.5 billion worth of ether, believed to be the largest crypto heist in history.
Reuben Conceicao, chief strategy officer at digital wallet company Metasig, commented, "It's a combination of macroeconomic factors. Increased tariffs, geopolitical uncertainties, and the Bybit hack have all contributed to a decline in confidence."
The drop in prices has negatively impacted crypto-related stocks in U.S. premarket trading.
Shares of crypto exchange Coinbase Global and bitcoin investment firm Strategy fell by 2.3%, while miners Riot Platforms Inc and MARA Holdings saw declines of about 3.5%.