The sell-off, which comes after a period of significant gains tied to Trump's pro-crypto stance, coincided with a major exchange hack and concerns over the volatile memecoin sector.
Bitcoin suffered a steep decline early Tuesday, crashing to $89,000 as financial markets reacted to newly announced tariffs from Trump's administration. The drop marked the most significant downturn of his presidency, following months of growth fueled by his pledges to integrate cryptocurrency into US financial policy.
The broader market decline extended beyond crypto, with stock markets also sliding. Analysts suggested that investors are still awaiting further details on Trump's promised crypto-friendly policies, including the establishment of a Bitcoin Strategic Reserve.
The downturn was further exacerbated by a large-scale security breach at the Bybit exchange, where attackers stole $1.5 billion in what has been described as the largest digital heist in history.
Ethereum, the second-largest cryptocurrency, faced even steeper losses, plunging nearly 11% in the past 24 hours. The slump reflects mounting uncertainty over the industry's stability, with some experts warning that the rising popularity of speculative memecoins could undermine confidence in the sector.