Bitcoin and other cryptos fell on Monday as investors reacted to renewed trade tensions and a sharp decline in technology stocks, fueling broader risk-off sentiment across markets.
The world's largest crypto dropped 5% to $91,000 by late afternoon in the U.S., its lowest level since February 3, while Ethereum slid 11% to $2,500, CoinGecko data shows.
The decline in crypto comes as U.S. equities weakened, with the Nasdaq Composite shedding more than 1% amid concerns over artificial intelligence demand and upcoming earnings from chipmaker Nvidia.
The S&P 500 fell for a third straight session, while the Dow Jones Industrial Average eked out a small gain.
Investor sentiment also took a hit after U.S. President Donald Trump confirmed tariffs on Canadian and Mexican imports would move forward as planned, reigniting concerns over inflation and economic growth.
Bitcoin, Ethereum Liquidations Surge as Solana, XRP and Dogecoin Plummet
It's a blood red Monday across the crypto markets. Broadly, the crypto market has fallen more than 6% over the last day, with some leading coins like Solana, XRP, and Dogecoin showing much larger losses during the same span. Bitcoin's dip is relatively modest compared to the rest of the market, with the leading asset down over 2% at of this writing to a current price of $93,417. It nearly touched $93,000 on its way down, but has rebounded slightly. Ethereum, meanwhile, has suffered a deeper los...
"Tariffs pay for the tax cuts. To me, there’s not much new here," Joe McCann, founder of crypto-focused investment firm Asymmetric, told Decrypt. "This type of headline risk will continue this year."
McCann argues that the Trump administration’s use of tariff revenue will help offset the fiscal impact of extending tax cuts and limit the addition of trillions to the national debt over the next decade.
Dismissing concerns over Trump’s tariffs, Marco Lim, managing director at Solowin Holdings and founding partner of MaiCapital, told Decrypt the market rout is driven more by a "risk-off mood" following the Bybit hack, which saw over $1.4 billion in ETH and stETH withdrawn from its hot wallet on Friday.
"Bitcoin has been stuck in this range for a while, and I believe most of the good news in crypto is already priced in. It should test $90,000,” Lim said.
The Federal Reserve’s next move remains a key focus for investors, with expectations for rate cuts later this year still in flux.
U.S. Treasury yields edged lower on Monday as markets reassessed inflation risks, but uncertainty over monetary policy and geopolitical developments kept traders on edge.
Bitcoin ETFs Have Shed $929 Million So Far in February
Outflows from exchange-traded funds tracking Bitcoin's spot price have accelerated as pangs of pessimism hit the crypto market. Data from UK-based asset manager Farside Investors shows that outflows from spot Bitcoin ETFs topped $928.9 million over the past three weeks, since the first trading day in February. This has coincided with Bitcoin trading within an exceedingly tight range of between $94,000 and $98,000 for most of February. Speaking at the Consensus 2025 conference in Hong Kong last w...
Other analysts Decrypt spoke to said the renewed tariff uncertainty, combined with tech-sector weakness, will continue to weigh on risk assets, including crypto. However, they aren’t the largest headwinds on investor’s radars.
"Tariffs are somewhat inflationary, but they have a greater impact on slowing growth," Ryan McMillin, chief investment officer at crypto fund manager Merkle Tree Capital, told Decrypt.
"Ending the war in Ukraine would be more deflationary than tariffs would be inflationary. The market seems to need more time to decide," he said.
Investors were also wary of Nvidia’s upcoming earnings report on Wednesday, with concerns mounting over demand for its AI chips following the emergence of lower-cost alternatives from China.
Bitcoin, which often trades in line with risk-sensitive technology stocks, extended losses as Nasdaq’s decline deepened.
More than $686 million in crypto-leveraged positions were liquidated over the past 24 hours, according to data from Coinglass, suggesting forced selling contributed to the downturn.
Microsoft Stock Dips on Report of Data Center Lease Cancellations
Microsoft stock dipped on Monday after investment bank TD Cowen reported the tech giant canceled leases on two data centers in the U.S. The stock fell 1.8% during Monday's trade but has since recovered back to its opening price of $404.04, according to MarketWatch data. Microsoft terminated select leases with at least two private data center operators across multiple U.S. markets, accounting for “a couple of hundred megawatts” of power, according to a copy of TD Cowen's report as cited by Bloomb...
While forced liquidations exacerbated the selloff, some analysts believe the washout could improve market structure by reducing excess leverage.
“The big liquidation we just had meant a lot of leveraged positions are flushed out, implying more resilience on the downside," Peter Chung, head of research at Singapore-based algorithmic crypto trading firm Presto, told Decrypt.
Chung pointed to a Bitcoin-specific catalyst in the form of the President’s Working Group on Financial Markets’ regulatory review, which required agencies to identify existing crypto-related regulations by last week’s deadline.
With the regulatory review process now complete, Chung expects forthcoming details to shape market sentiment, potentially offering a tailwind for Bitcoin.
“If I had to bet, I think Bitcoin will outperform other risk assets in the near term,” Chung said.
