Bitcoin falls below $80,000 mark on Friday for the first time in over three months. This is because sell-off in the cryptocurrency sector gathered pace amid volatility in global markets. The cryptocurrency saw a significant drop of over 5% during the day, hitting a low of $79,666, its weakest point since November 11, 2024.
Bitcoin has reached its an all-time high of over $105,000 in mid-December, and since then the cryptocurrency’s market value has plummeted by approximately 25%. Notably, after Donald Trump’s election win in November, the cryptocurrency market experienced a massive surge. The rally was largely driven by Trump’s campaign promises to ease regulations on digital tokens and make the United States a global hub for cryptocurrency.
Bitcoin’s recent gains were in line with the upward trend in global markets, but the excitement has worn off lately. This is largely due to the US president’s stance on trade, imposing tariffs on partners and threatening to ignite a global trade war. Furthermore, Trump’s promises to cut taxes and reduce immigration have sparked worries about rising inflation. This may lead the Federal Reserve to keep interest rates high for longer than expected. Meanwhile, the data suggests that the US economy is slowing down.
Taking all these factors in consideration, we find 2 main reasons that may be pulling the prices of Bitcoin downward.
- The decline comes as optimism about U.S. support for digital currencies drops and uncertainty grows over U.S. President Donald Trump’s tariff plans.
- This was further fuelled due to a major hack of rival cryptocurrency ether, worth $1.5 billion.
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