Here are the reasons that have contributed to this enormous meltdown.
Crypto struggles
Matt Simpson, senior market analyst at City Index, explained that “Inflationary pressures, growth prospects are crumbling and Trump’s tariffs are not going away. And with Trump’s attention on anything except deregulating crypto, bitcoin traders are not happy,” as quoted by Tech Central.
Faded hopes for crypto-friendly policies
Just a few weeks ago, bitcoin surged on hopes that the Trump administration would ease crypto regulations. But that optimism has fizzled as promises for policy changes have not materialized, leaving many investors feeling uncertain.
A risky asset
Joshua Chu, co-chair of the Hong Kong Web3 Association, said that “bitcoin price decline shows that positive sentiments from a crypto-friendly administration and high-profile endorsements have run their course”, as quoted in the report. He added, “It’s clear bitcoin is a risk asset, not the inflation hedge or digital gold it’s often touted to be,” quoted Tech Central.Even Trump’s latest tariffs triggered a broader pullback from risk assets, including crypto, reported GuruFocus.
Fall of “TRUMP” and “MELANIA” tokens
Trump’s own memecoin “TRUMP” has lost 50% of its value since its launch, while his wife’s token “MELANIA” dropped 90%, reported Tech Central.
Bybit hack
The crypto community is on edge after Bybit, the world’s second-largest exchange, reported that hackers stole about $1.5 billion worth of ether in what is being called the biggest crypto heist ever, as per the report.
The end of the crypto hype?
According to Tech Central, investors are pulling back from Bitcoin exchange-traded funds (ETFs), with $2.27 billion in outflows just this week. Bank of America analysts noted that Bitcoin’s struggle to break above $97,000 since November is a clear sign that the “bro bubble” around crypto might be bursting, as per the report.
Over the past couple of years, much of the crypto hype was driven by young, social media-savvy influencers and tech entrepreneurs, often referred to as “crypto bros,” but now that enthusiasm seems to be fading, as per Tech Central.
According to GuruFocus, “institutional players are scaling back, recalibrating expectations, and waiting for real policy moves before making their next big bet.”
FAQs
Why is the cryptocurrency market crashing right now?
The market is experiencing a major sell-off, with over $810 billion wiped out. A mix of inflation concerns, ongoing tariffs, regulatory uncertainty, and major hacks like the Bybit breach have shaken investor confidence.
What happened to Trump’s memecoin?
Trump’s memecoin “TRUMP” has lost 50% of its value, while the “MELANIA” token dropped by 90%.
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