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A week-long rout in Bitcoin worsened Friday, with the digital asset hitting an over 3-month low, reversing gains that followed the election of U.S. President Donald Trump.
Bitcoin was trading at about $78,782 in trading in Asia, down 5.5% on the day and about 25% lower than an all-time high from mid December.
Bitcoin had enjoyed a surge in prices following Trump’s victory in November, with the leader having posed himself as a pro-crypto candidate during his campaign.
However, prices have slipped as investors shun assets perceived to be risky given the weakness in global equity markets and amid uncertainty surrounding the new President’s tariff policy and resolutions to the Russia-Ukraine and Israel-Gaza wars.
Investor sentiment was also soured by news that Bybit, a major cryptocurrency exchange, suffered a $1.5 billion hack in what’s estimated to be the largest crypto heist in history.
“It seems that the market has become volatile in reaction to the Bybit incident,” Jeff Mei, chief operating officer at crypto exchange BTSE said in a statement sent to CNBC, adding that inflation concerns and expectations of fewer rate cuts by the U.S. Federal Reserve have also suppressed markets.
Still, some crypto bulls remain positive on Bitcoin’s outlook as they await key regulatory developments from the Trump administration.
Already, Trump has signed an executive order promoting the advancement of cryptocurrencies in the U.S. and developing a national digital asset stockpile. Meanwhile, his administration has created task forces and a “crypto czar” tasked with supporting a clear regulatory framework for crypto assets.
Geoffrey Kendrick, head of digital assets research at Standard Chartered, said in an interview with CNBC’s “Squawk Box Europe” on Thursday that bitcoin could surpass the $200,000 threshold this year.
Increased crypto adoption by institutions along with some “regulatory clarity” in the U.S., should lead to less volatility over time, he said.
—CNBC’s Ryan Browne contributed to this report
Correction: This article has been updated to reflect the percentage decline on the day in the price of bitcoin.
