Bitcoin fell on Tuesday, continuing its recent declines and dropping to half its value from its record high in October as uncertainty over US tariff policy weighed on risk appetite for cryptocurrencies.
Prices of broader cryptocurrencies also continued their recent declines as institutional and retail traders continued to sell off their holdings. Escalating geopolitical uncertainty surrounding Iran and the AI-driven sell-off on Wall Street further dampened sentiment.
Bitcoin fell by about 4% to $63,131.3 by 9:13 AM Saudi time. The cryptocurrency had dropped to $62,758.2 earlier in the day.
Bitcoin loses 50% from its record high; tariff fears weigh on the market.
Tuesday's losses have left Bitcoin now trading about 50% below its record high of $126,272 set in early October.
The world's largest cryptocurrency has been in a prolonged decline ever since, with new US regulatory measures and continued buying by its largest institutional holder, Strategy, doing little to bolster sentiment.
Strategy& revealed it purchased an additional 592 bitcoins on Monday. The company is experiencing significant losses in the value of its Bitcoin holdings, as the cryptocurrency is also trading below Strategy&'s average Bitcoin cost of $76,020.
On-chain analysis from CryptoQuant and Coinglass showed that large Bitcoin holders – known in the industry as whales – continued to move huge amounts of the cryptocurrency to trading platforms, most likely to sell more of the currency.
Meanwhile, there appeared to be a shortage of major buyers among institutional and retail investors. Glassnode data showed that institutional investors dumped Bitcoin spot exchange-traded funds (ETFs) for the fifth consecutive week through Monday.
Uncertainty over Trump's tariffs is putting pressure on the system; new tariffs are going into effect.
Bitcoin's latest wave of weakness was driven mainly by rising uncertainty over US trade policy, after the Supreme Court struck down the bulk of President Donald Trump's trade tariffs.
Trump responded by announcing global tariffs of 15% under a different legal framework, although the tariffs only went into effect at 10% at midnight on Tuesday.
Trump now faces a greater legal challenge to imposing and raising his trade tariffs, even though the president has indicated few plans to roll back his tariff agenda. He has also threatened countries with higher tariffs if they attempt to renegotiate recent trade deals with Washington.
While cryptocurrency markets are not directly affected by trade disruptions, they are highly sensitive to shifts in market sentiment due to their entirely speculative nature. Uncertainty surrounding US tariffs has triggered risk aversion across global financial markets.
Cryptocurrency prices today: Altcoins follow Bitcoin's losses amid lack of relief
Most alternative currencies fell in tandem with Bitcoin on Tuesday, as the sector saw little respite from its prolonged slump.
Ether, the world's second-largest cryptocurrency, fell 2.8% to $1,826.75, remaining close to its lowest levels in early February.
XRP and BNB fell by 2.6% and 1.4% respectively, while Cardano and Solana fell by 3.3% and 2.8% respectively.
Among the meme coins, Dogecoin fell by 3.6%, while $TRUMP fell by 0.9%.
