Bitcoin Crashes Below $90K as Crypto Sell-Off Accelerates
Bitcoin has plunged below the $90,000 mark, hitting its lowest level since mid-November, as the crypto market reels under the weight of Donald Trump’s trade policies and a series of damaging industry developments. The flagship cryptocurrency dropped as much as 6.1% before stabilizing at $89,700 on Tuesday morning in London. This dramatic decline comes after Bitcoin’s post-election rally, fueled by Trump’s win, started to reverse amid growing macroeconomic uncertainty.
Crypto Market in Freefall
Other major cryptocurrencies weren’t spared in the sell-off. Ether, XRP, and Solana all recorded steep declines, reflecting the broader bearish sentiment in the digital asset market. The crypto turmoil marks a stark contrast to the euphoric rally that followed Trump’s victory in November, which saw Bitcoin soar on optimism about his pro-crypto stance. However, since his inauguration in January, the digital asset has tumbled nearly 20% as his aggressive trade tariffs and escalating geopolitical tensions have unnerved investors.
“The fall in Bitcoin prices is likely related to broader macro uncertainty that has hit most financial markets in the last couple of days and is linked to the various tariffs being announced by President Trump,” said Adrian Przelozny, CEO of crypto exchange Independent Reserve.
The impact on crypto derivatives markets has been severe. According to data from CoinGlass, more than $1.34 billion worth of bullish crypto positions were liquidated in just 24 hours as traders scrambled to exit their leveraged positions.
Industry Setbacks Shake Investor Confidence
Adding to the turmoil, the crypto industry has faced a string of negative events, including a record-breaking exchange hack and a controversial memecoin scandal linked to Argentina’s President Javier Milei.
The biggest-ever crypto exchange hack targeted Bybit, with hackers—believed to be linked to North Korea—stealing approximately $1.5 billion worth of Ether. Analysts warn that the heist, which saw the stolen assets laundered at an unprecedented speed, underscores the growing sophistication of cybercriminals targeting the crypto space.
Meanwhile, memecoins launched by Donald Trump and his wife Melania have flopped spectacularly. The Trump token, which was hyped up before his inauguration, has plunged more than 80% from its peak, shaking confidence in his crypto-friendly policies.
“The Bybit hack was the latest in a string of events, such as questionable memecoin launches, that have brought back unhappy memories for crypto market participants,” said Caroline Mauron, co-founder of Orbit Markets, a provider of liquidity for crypto derivatives.
Regulatory Battles: A Turning Tide?
Amid the chaos, there’s been a surprising shift in regulatory attitudes under Trump’s administration. The U.S. Securities and Exchange Commission (SEC) has been backing down on several crypto-related lawsuits, signaling a potential softening of its stance on the industry.
Robinhood (HOOD) announced that the SEC has closed an investigation into whether the company failed to register certain digital assets as securities—without taking any enforcement action. “We applaud the staff’s decision to close this investigation with no action,” said Dan Gallagher, Robinhood’s chief legal, compliance, and corporate affairs officer.
Similarly, Coinbase (COIN), the largest U.S. crypto exchange, said last Friday that it expects the SEC to drop its lawsuit alleging the company operated as an unregistered securities exchange. OpenSea CEO Devin Finzer also claimed that the SEC had ended its probe into the NFT marketplace’s regulatory status.
“This is a win for everyone who is creating and building in our space,” Finzer posted on X (formerly Twitter).
Even Binance, the world’s largest crypto exchange, has seen a 60-day pause in its legal battle with the SEC, further hinting at a shift in regulatory direction.
What’s Next for Bitcoin?
Despite the regulatory reprieve, Bitcoin and the broader crypto market remain under pressure. Macroeconomic uncertainty, continued hacks, and failed crypto projects have soured investor sentiment. With Trump’s policies causing further economic unease, analysts warn that the crypto market could remain volatile in the coming weeks.
Investors now face a critical question: Was the post-election rally a false hope, or is this just another temporary shakeout before Bitcoin’s next leg up?
Stay tuned as the drama in the crypto market unfolds.
