Bitcoin's post-election surge has lost its footing, dragging the benchmark cryptocurrency below $90,000

Bitcoin's post-election surge has lost its footing, dragging the benchmark cryptocurrency below $90,000 on Tuesday—its lowest level since 18 November.

Bitcoin’s post-election surge has lost its footing, dragging the benchmark cryptocurrency below $90,000 on Tuesday—its lowest level since 18 November.

The world’s largest cryptocurrency slid by as much as 7.5 per cent over the course of the day before recovering some losses, ultimately trading around $86,481 by lunchtime in New York.

Global investors pulled back from riskier assets amid signs of a US economic slowdown and President Trump’s pledges to impose a 25 per cent levy on imports from Canada and Mexico as early as March reignited concerns over rising protectionism.

Those plans, first announced in December, sparked a sharp sell-off in stocks and propelled investors towards the relative safety of US Treasuries. That, in turn, pushed yields on the benchmark 10-year note to two-month lows on Tuesday.

In addition, several recent surveys on both business and consumer activity in the U.S. showed that the economic recovery may be losing steam as rising borrowing costs and persistent inflation are eroding confidence.

“Trump’s continued tariff announcements have sparked another burst of uncertainty, prompting a risk-off stance across markets, which is continuing to sell off bitcoin,” said Marcel Heinrichsmeier, a crypto assets analyst at DZ Bank.

Bitcoin’s rally surged above $100,000 in December, fueled partly by optimism that the new U.S. administration would promote more crypto-friendly measures.

Those would include the launch of a strategic bitcoin fund and looser regulation, which, in turn, may encourage greater institutional demand for the digital asset. However, progress on such policies has been muted so far, providing little impetus for fresh investment flows.

Crypto sentiment also took another hit last week with news of a massive hack at Bybit, the world’s second-largest exchange after Binance.

Hackers stole approximately $1.5 billion worth of ether tokens, the world’s second-largest cryptocurrency, in one of the largest cryptocurrency heists on record. The theft shook investors’ faith in the security of digital assets, especially in the wake of several other hacks over the past year.

“Tuesday’s sell-off is likely a delayed reaction to the Bybit hack, which happened last week, and the Bybit funds were in ether,” said Joseph Edwards, head of research at Enigma Securities.

Bitcoin has now dropped nearly 8 per cent over the past week, while smaller altcoins like dogecoin have slid by as much as 20 per cent.

Still, bitcoin is about 64 per cent higher year-on-year from its November 2022 low of $54,479, to which it slid after the stunning collapse of FTX in late 2022 sparked widespread fear and liquidity crunches in crypto markets.

It remains to be seen whether the latest dip will prove a temporary blip or the start of a deeper slide. That may depend on whether market nerves settle and any crypto-friendly policies materialise.