Bitcoin Plunges Amid Tariff Fears and Bybit Hack

Bitcoin has reached a three-week low, with macroeconomic uncertainties and concerns surrounding a hack at the Bybit exchange contributing to the decline. The world's largest cryptocurrency witnessed a significant drop of 5% to $91,000, as a sell-off in tech equities and new trade tensions unfolded.

Tariffs have been identified as somewhat inflationary, but they have a greater impact on slowing economic growth. Ryan McMillin, chief investment officer at Merkle Tree Capital, highlighted the broader economic impact of tariffs, stating, "Tariffs are somewhat inflationary, but they have a greater impact on slowing growth."

As Bitcoin declines to a three-week low, surrounding factors such as tariff-related concerns and falling tech stocks have significantly impacted investor sentiment. The leading cryptocurrency fell by 5% to $91,000, with Ethereum reflecting an 11% drop to $2,500 according to CoinGecko. These fluctuations are largely tied to a broader risk-off atmosphere in global markets, exacerbated by uncertainties around U.S. tariffs on imports from Canada and Mexico, further ignited by instability in equities, particularly within technology sectors.

U.S. President Donald Trump's recent confirmation to proceed with tariffs has made an imprint on market dynamics, reviving fears of inflation and its corrosive effect on economic expansion. Joe McCann, founder of crypto-focused firm Asymmetric, stated, "Tariffs pay for the tax cuts. To me, there’s not much new here." His insights suggest that the market might be primed for ongoing volatility as fiscal policies evolve. In this context, notable indexes like the S&P 500 and the Nasdaq have responded uneasily, further reflecting the intricate link between cryptocurrency movements and macroeconomic news.

In the past 24 hours, over $686 million in leveraged crypto positions were liquidated, amplifying the downward momentum in the cryptocurrency market. The turbulence has been attributed to a combination of forced selling and substantial investor withdrawal triggered by the uncertainty surrounding the Bybit hack, where more than $1.4 billion of assets were compromised. Peter Chung from Presto underscores the silver lining of this situation, noting that these liquidations may result in a healthier market structure by eliminating excessive leverage. "This liquidation we just had meant a lot of leveraged positions are flushed out