The crypto market has just experienced one of its most violent downturns in months.

The crypto market has just experienced one of its most violent downturns in months. After reaching a historic high of $109,000 on January 20, Bitcoin plunged by 28 %.

The crypto market has just experienced one of its most violent downturns in months. After reaching a historic high of $109,000 on January 20, Bitcoin plunged by 28 % over the past three weeks. This drop has wiped out billions of dollars in market capitalization.

Such a brutal reversal occurs against a backdrop of economic tension and turbulence in the financial markets. But beyond a simple technical correction, several major events have contributed to this decline. Among fears of macroeconomic instability, record cyberattacks, and political disillusionments, we take a look back at the causes of this downfall and its implications.

A crash amplified by external shocks

The volatility of Bitcoin is not surprising, but this time, the drop can be explained by a conjunction of major shocks. Indeed, the first trigger factor is based on an unfavorable macroeconomic context. Since Donald Trump’s arrival at the White House, his economic announcements have sown confusion in the markets. In particular, the prospect of new tariffs on international trade has cooled investors. “This retreat can be interpreted as a response to macroeconomic fears related to Trump’s tariffs and geopolitical uncertainty,” explains Caroline Bowler, CEO of BTC Markets.

The correction goes beyond Bitcoin. Additionally, the Nasdaq 100 has lost 7 % since its last peak on February 19, illustrating a widespread distrust of risky assets.

The Achilles' heel of the crypto ecosystem, cybersecurity, has also played a crucial role. On February 21, 2025, the Bybit exchange suffered the largest hacking in crypto history, orchestrated by North Korea’s Lazarus Group. The hackers stole $1.5 billion in crypto. They primarily succeeded in breaching the cold wallets, which are supposed to be ultra-secure as they are disconnected from the Internet.

“Trust has been shaken after this $1.5 billion hack, which represents a colossal sum,” emphasizes Zaheer Ebtikar, co-founder of Split Capital Fund. This shock triggered a panic sell-off, but it has also intensified doubts about the reliability of trading infrastructures, resulting in the temporary withdrawal of some investors from the market.

A market under pressure and disappointed expectations

The price decline has then been exacerbated by technical market movements. In February, Bitcoin exchange-traded funds (ETFs) recorded a net outflow of $3.3 billion, a negative record since their launch in January 2024. The dynamic is simple: when the price of Bitcoin drops, some investors withdraw their capital from ETFs, which increases selling pressure on the market. Thus, “speculative money that enters Bitcoin also exits quickly when a correction occurs,” analyzes Michael Rosen, investment director at Angeles Investments.

Another aggravating factor is the end of optimism related to Donald Trump. During his campaign, the American president positioned himself as a staunch advocate of cryptos and promised the establishment of a national Bitcoin stockpile. But since his inauguration, concrete announcements have been slow to arrive. The project led by Senator Cynthia Lummis, which aimed to have the U.S. government purchase up to a million bitcoins over five years, has found no support in Congress.

“What drives this decline is the absence of the pro-crypto executive orders that were expected and the inflation figures in the United States,” explains Paul Howard, director at Wincent. Even at the state level, ambitions for strategic Bitcoin reserves have been stymied: Montana, North Dakota, and Wyoming have all rejected proposals in this regard, citing the risks and volatility of cryptos.

After this brutal correction, the market is now questioning the next direction of Bitcoin. Is this a simple consolidation before a new bull run, or the beginning of a longer bear cycle? It will all depend on Trump’s economic decisions, on the evolution of regulation, and above all, on whether investor confidence returns or not. For now, caution remains the order of the day, and Bitcoin will need to demonstrate its resilience in the face of this new stress test.