Bitcoin Crashes 7%, Drops Below $89,000 as Crypto Market Selloff Intensifies

Bitcoin plunged 7% on February 25, dropping below the $89,000 mark for the first time in over three months amid a broad crypto market selloff. According to Binance, Bitcoin was trading at $88,893 at 3:20 PM IST, marking a significant decline from its December all-time high of $108,000.

The crypto downturn also hit Ethereum, which tumbled 10.5% to $2,388, while Solana plummeted 13% to $137.87. The overall market capitalization of Bitcoin now stands at $1.76 trillion, reflecting a weakening sentiment among investors.

What Triggered the Crypto Crash?

The sharp decline in Bitcoin and other cryptocurrencies follows a series of negative developments, including:

• Bybit Hack: The major crypto exchange suffered its largest-ever security breach, leading to increased concerns about digital asset security.
• Argentina’s Meme Coin Scandal: Reports linked Argentine President Javier Milei to a fraudulent meme coin scheme, further denting investor confidence.
• US Economic Slowdown: Weak consumer sentiment, declining business activity, and concerns over inflation have weighed on the global financial markets, including crypto.

"The Bybit hack was the latest in a string of events, such as questionable memecoin launches, that have brought back unhappy memories for crypto market participants," said Caroline Mauron, co-founder of Orbit Markets, a firm specializing in crypto derivatives liquidity.

From Euphoria to Caution: Bitcoin’s 18% Drop Since December

The latest selloff stands in stark contrast to the crypto euphoria seen around the U.S. elections. Bitcoin had surged past $108,000 in December following Donald Trump’s pro-crypto stance, which fueled investor optimism about regulatory clarity.

However, Bitcoin has since declined 18%, as market sentiment turned bearish. Dogecoin, which had also rallied due to Elon Musk’s endorsement, mirrored Bitcoin’s drop, plunging 13% to $0.201 on February 25.

Adding to the pressure, recent data shows that U.S. consumer sentiment has hit a 15-month low, with inflation expectations rising to 3.5% amid Trump’s proposed tariffs. The market is now watching for further signals on U.S. economic policy and Federal Reserve actions to gauge whether the crypto downturn will continue.