Bitcoin lost value last month as financial markets became more unstable, with concerns about a global trade war being the main cause. Photo: Dado Ruvić/Reuters
Bitcoin suffered a steep decline in February, marking its worst monthly performance since June 2022. The cryptocurrency dropped 17.5%, sliding into a bear market after the initial excitement surrounding Donald Trump’s election victory faded. However, Trump’s latest announcement on Sunday helped lift the market again.
Bitcoin’s Sharp Decline
Bitcoin ended February at approximately $84,252 after hitting a three-month low of $78,273 on Friday. This drop of over 20% from its record high of $109,071 in mid-January placed the cryptocurrency in a technical bear market. Investors grew uneasy due to mounting economic uncertainties, triggering a widespread sell-off in financial markets.
Global Trade War Concerns Shake Crypto
Volatility increased as Trump announced plans to impose new tariffs on imports from Canada, Mexico, and China. The uncertainty surrounding these trade policies sent shockwaves across financial markets, dragging down stocks and the US dollar. Cryptocurrencies, which had initially surged on hopes of a pro-crypto stance from the Trump administration, followed suit and declined.
Hacking Incident Adds to the Chaos
Investor confidence took another hit after a cyberattack on the Bybit exchange led to the theft of $1.5 billion in digital assets. The incident raised concerns about security in the crypto space, further driving negative sentiment. Market analysts pointed out that both regulatory fears and security breaches have contributed to Bitcoin’s steep decline.
Trump’s Move Sparks Hope
While February was rough for bitcoin, Trump’s latest announcement reignited optimism. He revealed that his administration’s Crypto Strategic Reserve would include digital assets such as XRP (Ripple), SOL (Solana), and ADA (Cardano). Trump also confirmed that Bitcoin and Ethereum would play central roles in this reserve. This revelation sent Bitcoin soaring back to $94,000 on Sunday.
Investor Sentiment Remains Fragile
Despite the rebound, market analysts warn that uncertainty lingers. Susannah Streeter of Hargreaves Lansdown noted that unless Trump provides more concrete support for the crypto industry, investor jitters could persist. She highlighted that previous bear markets had seen steep declines followed by recoveries, but sustained momentum remains uncertain.
Looking Ahead
Bitcoin has bounced back from past slumps, such as its 41% drop in June 2022, which was followed by a 26% rebound in July. While Trump’s crypto-friendly policies could offer a lifeline, external factors like trade policies, regulatory changes, and market security concerns will continue shaping the future of digital assets.
