Bitcoin’s recent sell-off got steeper on Friday as the currency came closer to erasing all of the gains it made in the bull run following President Donald Trump’s election in November.
The original cryptocurrency has fallen 28% from its all-time high of $109,000 just last month, tumbling to $78,000 on Friday. The currency’s recent downturn is symptomatic of economic pressures that have been weighing on the crypto and stock markets for the last few weeks, not the least of which is Trump’s ongoing threat of major tariffs on countries like Canada and Mexico.
However, while the S&P 500 is down 3% in the last month, cryptocurrencies have been hit the hardest by growing anti-risk sentiment among investors. Popular cryptocurrencies have fallen by double digits, with Dogecoin down 39% and Ethereum down 28% in the last month.
“Bitcoin’s drop below $80,000 isn’t happening in isolation,” Mike Cahill, core contributor to Pyth, a network that provides market data to applications on multiple blockchains, tells Fortune. “What we’re seeing right now is a broader repricing of risk across global markets.”
On Thursday, Trump took to his own social media platform, Truth Social, to reaffirm that a 25% tariff on Mexico and Canada will go into effect on March 4, as well as a new 10% tariff on China that will be applied on top of an existing 10% tariff that went into effect Feb. 4. Investors fear that the tariffs will increase inflation and lift the price of everyday goods.
In addition to the tariffs, other concerns have led investors to reorganize their portfolios and dump their crypto holdings. Last week’s $1.4 billion hack of crypto exchange Bybit and growing frustration with memecoin rug pulls—like Argentina’s $LIBRA disaster—deepened distrust in crypto as a safe investment.
The downturn does not seem to have been slowed by a string of good news that altered the outlook for the cryptocurrency industry this week. The Securities and Exchange Commission officially dropped several lawsuits and investigations against large crypto companies this week, including Coinbase, Uniswap, Robinhood, and Consensys’s MetaMask. The end of those challenges has long been a major goal for industry leaders, who have accused the SEC of unfairly regulating the industry by enforcement rather than developing a framework specifically designed for crypto.
Despite the sell-off this week, Cahill says that he remains bullish on Bitcoin and its long term trajectory.
“Historically, Bitcoin thrives in uncertainty, and long-term players know that these shakeouts clear weak hands while setting the stage for the next leg up,” he said.