Bitcoin, the king of cryptocurrencies, has taken a massive hit, plunging below $90,000 for the first time since November 2023. Investors are on edge as a perfect storm of macroeconomic uncertainty, regulatory concerns, and security breaches rocks the market.

On Tuesday, Bitcoin dropped 7.25%, hitting $87,169.76, while smaller altcoins suffered even steeper losses. The reasons? A mix of U.S. tariff concerns, a record-breaking $1.5 billion hack on the Bybit exchange, and an overall shift in investor sentiment.

But is this just a temporary setback, or is the crypto market entering a prolonged slump? Let’s break it down.

The Big Factors Behind Bitcoin’s Fall

Bitcoin’s price swings are nothing new, but the latest crash is being driven by a combination of economic uncertainty, policy shifts, and security breaches. Here’s a closer look at what’s happening.

1. U.S. Tariffs: A Blow to Investor Confidence

Global markets are uneasy after former U.S. President Donald Trump reaffirmed plans to impose a 25% tariff on imports from Canada and Mexico starting in March. While tariffs usually impact trade and manufacturing sectors, they also have a ripple effect on financial markets, including cryptocurrencies.

Why? Because higher tariffs lead to inflation concerns, prompting investors to seek “safer” assets like gold and U.S. Treasury bonds instead of riskier ones like Bitcoin.

Crypto analyst Marcel Heinrichsmeier of DZ Bank pointed out that macro uncertainty is the biggest reason for Bitcoin’s latest price drop. Investors are worried that the U.S. economy’s so-called exceptionalism might be fading, which is making them more cautious about holding high-risk digital assets.

2. The Bybit Hack: A $1.5 Billion Disaster

If market uncertainty wasn’t enough, the biggest hack in crypto history has sent shockwaves through the industry.

Dubai-based Bybit, the world’s second-largest crypto exchange after Binance, was hit by a cyberattack last week, resulting in a massive loss of $1.5 billion in digital assets.

Blockchain research firm Elliptic called it “almost certainly the single largest known theft of any kind in all time.”

The hack raised serious concerns about security and trust in crypto exchanges, prompting investors to pull funds out of exchanges and move them to safer storage methods.

Crypto researcher Joseph Edwards of Enigma Securities called Bitcoin’s sharp decline a “delayed reaction” to the Bybit hack, explaining that while markets initially held up well, the true impact of such a major breach tends to hit later.

As a result, the broader crypto market suffered a cascading sell-off, with Bitcoin and Ethereum both plummeting to multi-month lows.

3. The Altcoin Bloodbath

Bitcoin wasn’t the only victim of the latest market downturn. Smaller cryptocurrencies—often more volatile—were hit even harder.

🔹 Ethereum (ETH) dropped 8.46%, sinking to $2,414.29, its lowest price since October.
🔹 Memecoins like Dogecoin and blockchain network tokens like Solana (SOL) and Cardano (ADA) suffered 20%+ losses in just a week.

Crypto entrepreneur Charles Wayn, co-founder of Galxe, described the crash as a brutal but expected sell-off, made worse by fears over global tariffs and security concerns.

Simply put, when Bitcoin sneezes, the entire crypto market catches a cold—and this time, the symptoms are severe.

Regulatory Uncertainty: Where Is Crypto Policy Headed?

Just a few months ago, the market was buzzing with optimism.

Investors expected crypto-friendly regulations, new Bitcoin-backed investment funds, and policy shifts that would drive mainstream adoption.

In December 2023, Bitcoin surged past $100,000 for the first time, fueled by speculation that the U.S. would soon introduce regulatory clarity and institutional backing for digital assets.

But since then, little concrete action has been taken.

While the Biden administration initially made crypto-friendly appointments, actual regulatory changes haven’t materialized. Instead, investors are now pulling money from Bitcoin-backed exchange-traded funds (ETFs), with the largest ETFs recording a massive $644 million net outflow—the highest since their launch in January 2024.

This signals that investors are losing confidence in crypto as a long-term investment vehicle—at least for now.

What’s Next? Will Bitcoin Rebound?

Despite the latest downturn, Bitcoin has weathered far worse crashes in the past.

🔹 In 2021, Bitcoin lost 50% of its value in just a few months, falling from $64,000 to $30,000—only to bounce back stronger.
🔹 In 2018, Bitcoin tumbled 80% from its all-time high, before staging a record-breaking rally in the following years.

So, what’s different this time?

Short-Term Outlook

In the coming weeks, the crypto market will likely remain volatile, influenced by:

✅ U.S. economic policies and tariffs—Will the government soften its stance on trade, or will global financial uncertainty continue?
✅ Security measures in crypto exchanges—Will Bybit and other platforms tighten security, or will further hacks shake investor confidence?
✅ Institutional money flows—Will ETFs continue seeing outflows, or will new regulatory clarity bring fresh investments?

Long-Term Perspective

While short-term turbulence is inevitable, Bitcoin’s long-term potential remains strong.

🔹 Adoption is rising, with countries like El Salvador and the UAE integrating Bitcoin into financial systems.
🔹 Institutional interest is still there, with major banks and hedge funds exploring Bitcoin investment products.
🔹 The technology behind Bitcoin—blockchain—remains revolutionary, offering a decentralized alternative to traditional financial systems.

As investor Joseph Edwards put it:

“Crypto markets tend to overreact in the short term but recover in the long run. We’ve seen this cycle repeat before.”

Is It Time to Panic?

Bitcoin’s fall below $90,000 is a wake-up call for investors—but it’s not the end of crypto.

While regulatory uncertainty, security breaches, and economic concerns are causing short-term panic, Bitcoin’s fundamentals remain strong.

History shows that crypto markets are cyclical, and downturns often set the stage for the next bull run.

For now, the best strategy for investors is to stay informed, watch the market closely, and prepare for the next big move—because, in crypto, volatility is the only certainty.