The shift in the digital asset market contrasts sharply with the post-election rally in November. Since Trump’s inauguration in January, Bitcoin has declined by nearly 20%. This drop is attributed to Trump’s aggressive trade policies and ongoing inflation concerns, which have shaken investor confidence. Adrian Przelozny, CEO of crypto exchange Independent Reserve, linked the fall in Bitcoin prices to broader economic uncertainty driven by Trump’s tariff announcements. Data from CoinGlass indicates that over $1.34 billion of bullish crypto positions were liquidated within 24 hours.
Industry-Specific Issues
The digital asset market’s sentiment has also been negatively impacted by recent industry-specific setbacks. These include a significant hack targeting the Bybit exchange and a memecoin controversy involving Argentina’s President Javier Milei. These events have contributed to the underperformance of digital coins compared to other risk assets, such as technology stocks. The Bybit hack has heightened concerns about the security of digital-asset platforms. Hackers, reportedly linked to North Korea, stole approximately $1.5 billion worth of Ether and began laundering the funds. This incident highlights the increasing sophistication of North Korean hackers.
Additionally, memecoins launched by Trump and his wife Melania just before the inauguration have performed poorly, undermining confidence in pro-crypto policies. According to CoinGecko data, the Trump token has fallen by more than 80% since its initial peak. Caroline Mauron, co-founder of Orbit Markets, noted that the Bybit hack and questionable memecoin launches have revived negative memories for crypto market participants.
The digital asset market faces ongoing challenges, with trade policies and industry-specific issues contributing to the recent downturn.