The cryptocurrency had previously soared to all-time highs of £86,100 per Bitcoin late last year, buoyed by an endorsement from Donald Trump and his incoming US administration
09:17, 26 Feb 2025
The value of Bitcoin has taken a tumble in recent days, falling below the £71,000 mark on Tuesday following a £1.2bn hack last week.
The cryptocurrency had previously soared to all-time highs of £86,100 per Bitcoin late last year, buoyed by an endorsement from Donald Trump and his incoming US administration.
However, both Bitcoin and Ether, the second-biggest crypto, have seen their values drop since then, with the recent theft of £1.2bn from a crypto exchange exacerbating the decline. Cryptocurrencies are digital currencies intended for internet use and don't have a physical form like traditional currencies.
They can be sent and received between individuals and are often traded for cash on platforms known as crypto exchanges. Created in 2008, Bitcoin stands as the largest and most established token.
Kathleen Brooks, research director at trading firm XTB, suggests that the current volatility in broader financial markets might be affecting the mood of crypto investors, noting that the dip in value is "a sign that the current environment of rising volatility is not conducive to cryptocurrency gains". Trump has been a clear proponent of the crypto sector, even proposing the establishment of a bitcoin "strategic reserve" before taking office as President, aiming to position the US as the global "crypto capital".
Former President Donald Trump and first lady Melania launched their own cryptocurrencies, $TRUMP and $MELANIA, to much fanfare. However, a month into office, the crypto market has reacted poorly to Trump's inaction on his promises, leading to a sell-off of bitcoin and other digital currencies.
Joel Kruger, a market strategist at LMAX, commented that investors are "looking for more follow-through on the administration's policies". Additionally, traditional finance firms that had recently begun dabbling in crypto are now showing less interest, with Kruger citing increasing global trade tensions as a cause.
The recent theft of £1.2bn worth of ether from Bybit has further shaken the market. The Dubai-based exchange confirmed that an attacker hijacked a digital wallet and moved the funds to an unknown address.
Despite this, Bybit CEO Ben Zhou assured that the platform could cover the loss, stating, "is solvent even if this hack loss is not recovered, all of clients assets are 1 to 1 backed, we can cover the loss". Nevertheless, this incident has triggered another wave of selling across major cryptocurrencies, as concerns about the industry's vulnerability to hacking persist.