Financial Insights That Matter
* Bitcoin caught up in tech selloff on tariff and growth
fears
* US crypto policy doubts and Bybit hack hurts crypto
sentiment
* Bitcoin ETFs see $2.27 billion outflows, crypto stocks
decline
SINGAPORE, Feb 28 (Reuters) – Bitcoin hit its lowest
since November and was set for its biggest weekly fall in over
two years, swept up in a sell-off in tech stocks at a time when
a $1.5 billion hack and doubts about U.S. crypto policy has left
industry sentiment fragile.
The world’s largest cryptocurrency by market value dropped
as much as 7% on Friday to $78,273, its lowest since
November 10 and on track for a fifth straight day of declines.
It has fallen 16% in the past week, its biggest weekly drop
since the collapse of the FTX crypto exchange in November 2022.
The broader crypto market has lost nearly half a trillion
dollars in the past week alone, 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,” said Matt Simpson, senior market analyst at City
Index.
Bitcoin typically trades loosely in line with assets like
tech stocks that rise when investors are optimistic about
economic growth. The tech heavy Nasdaq is at its lowest
since November.
Investors fear the so-called exceptionalism of the U.S.
economy might be fading and are nervous about U.S. President
Donald Trump’s moves to impose tariffs which have stoked fears
of higher global inflation and slower growth.
Investors judged AI darling Nvidia’s results harshly as
well.
NEW ENVIRONMENT
For the world’s largest cryptocurrency, the environment is
very different from mid-January, when it approached $110,000 on
optimism that the Trump administration would champion a
strategic bitcoin fund and loosen regulation.
But beyond a flurry of appointments of crypto-friendly
officials when Trump took office, there has been little concrete
news around that policy for investors.
The bitcoin price decline “shows that positive sentiments
from a crypto-friendly administration and high-profile
endorsements have run their course,” said 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
value, was down 6% at $2,149.38, around its lowest since January
2024.
Trump’s own “TRUMP” memecoin that he launched upon his
inauguration has lost 50% in value since then, while his wife’s
“MELANIA” token has lost 90%.
Investors have also been pulling money out of bitcoin
exchange-traded funds.
U.S.-listed bitcoin ETFs have seen outflows of $2.27 billion
so far this week.
Bank of America analysts said in a note on Friday the fact
that the average daily price of bitcoin had struggled to break
above $97,000 since November was the first sign of the “bro
bubble popping”.
Much of the hype around crypto in the last couple of years
has stemmed from, typically, younger male influencers on social
media and tech entrepreneurs that many nickname “crypto bros”.
The crypto world has been nervous after Dubai-headquartered
Bybit, the world’s second-largest exchange after Binance, said
last week hackers had stolen ether worth around $1.5
billion in what is thought to be the single largest crypto heist
of all time.
“It’s a combination of macro forces. More tariffs,
uncertainties around geopolitics and war, and the ByBit hack
didn’t help confidence either,” said Reuben Conceicao, chief
strategy officer at digital wallet firm Metasig.
The price fall hurt crypto-connected stocks in U.S.
premarket trading.
Crypto exchange Coinbase Global and bitcoin buyer
Strategy dropped 2.3%, while both miners Riot Platforms
Inc and MARA Holdings shed about 3.5%.
(Reporting by Rae Wee and Brigid Riley, additional reporting by
Medha Singh
Writing by Alden Bentley, Vidya Ranganathan and Alun John;
Editing by Sam Holmes, Amanda Cooper and Christina Fincher)
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