Bitcoin and its cryptocurrency peers have slumped in value over recent days as tariff threats from US President Donald Trump and new scandals affecting the sector shake confidence in volatile assets.
Bitcoin dived on Friday to trade under $80 000 for the first time since November.
Its low of $78 225.84 was more than 25 percent off levels touched last month as Trump, a strong backer of the cryptocurrency sphere, entered office.
Bitcoin had traded at around $95 000 at the start of the week before a mass exodus by investors seeking liquidity for assets deemed safer.
Fresh scandals
“Sentiment in the crypto market is on the floor,” noted Simon Peters, an analyst at traders eToro.
“The Bybit hack… shook investor confidence, as well as escalating trade concerns with tariffs on Mexico and Canada going ahead.”
Dubai-based cryptocurrency exchange Bybit last week reported that it had been robbed of $1.5 billion worth of ethereum, the second-biggest crypto token after bitcoin.
The US Federal Bureau of Investigation has accused North Korea of being behind what is the largest crypto heist in history.
The sector’s “downturn is attributed to several factors, including significant crypto scandals”, said Naeem Aslam, an analyst at Zaye Capital.
Earlier this month, Argentine President Javier Milei denied promoting a cryptocurrency that crashed, losing investors billions of dollars and prompting a flood of complaints and an investigation.
Argentina’s federal prosecutor’s office will examine whether Milei engaged in fraud or criminal association or was in breach of his duties when he praised the $LIBRA cryptocurrency on social media.
The currency’s value soared then crashed, and Milei deleted his blessing hours later, saying he had made a mistake.
From ‘scam’ to $TRUMP
Cryptocurrencies are based on blockchain technology, which publicly records transactions between people holding and exchanging them.
That has not kept a lid on theft, however, with an estimated $2.2 billion worth of the assets stolen last year, according to a report from specialist data firm Chainalysis.
Bitcoin was conceived in 2008 by a person or group writing under the name Satoshi Nakamoto.
It was pitched as a way to break free of mainstream financial institutions by establishing a decentralised platform for transactions.
Cryptocurrencies have since become targets of choice for online criminals, who often exploit weaknesses in major trading platforms or individual users’ digital wallets.
Despite having once branded cryptocurrencies a “scam”, Trump changed his stance and was a major advocate of them during his election campaign.
When bitcoin reached the landmark $100 000 level at the start of December following his presidential vote win the previous month, Trump wrote on his Truth Social platform:
“CONGRATULATIONS BITCOINERS!!! $100,000!!! YOU’RE WELCOME!!! Together, we will Make America Great Again!”
Trump has vowed to make the United States the “bitcoin and cryptocurrency capital of the world” and recently launched a meme coin called $TRUMP.
Future first lady Melania Trump also issued her own cryptocurrency, $MELANIA, to mark her husband’s inauguration.
After enjoying strong demand on launch, the prices of both quickly collapsed.
“Trump’s meme coin launches may have been damaging,” Neil Roarty, cryptocurrency analyst at ClickOut Media, told AFP.
It has not been all doom and gloom for the sector, however.
Crypto giant Coinbase said last week that the US Securities and Exchange Commission had agreed to drop its 2023 lawsuit against the company.
Trump had already delivered on a promise to end tight oversight of the industry by picking veteran Washington attorney Paul Atkins, who has worked with the crypto industry, to chair the SEC.
He replaced Gary Gensler, who had termed the cryptocurrency sector the “wild west”.
Among the biggest fallouts was FTX, a crypto platform that went bankrupt at the end of 2023, with its founder Sam Bankman-Fried later found guilty on several counts including fraud, conspiracy and money laundering.
Do you own any Bitcoin – or other cryptocurrency?
Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1
Subscribe to The South African website’s newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
