The cryptocurrency market and technology stocks experienced a significant downturn as global uncertainties intensified. A risk-off sentiment, fueled by deteriorating US economic data and President Trump's expanding tariff threats, contributed to the sharp decline. Bitcoin, the world's largest crypto token, slumped nearly 20% from its peak since Trump's inauguration on January 20, falling over 8% in just the past two days. Meanwhile, the US technology sector emerged as the worst performer on Wall Street.
Economic indicators have painted a bleak picture, with consumer confidence in the US dropping to its lowest since August 2021. This decline in sentiment has been exacerbated by signs of resurging inflation and a hawkish shift by the Federal Reserve, which has further weighed on risk assets. Additionally, Tesla's shares tumbled more than 8% on Tuesday after news broke of a decline in its car sales, adding to the pressure on tech stocks.
In the realm of cryptocurrencies, the Dubai-based exchange Bybit, one of the world's largest crypto platforms with an average daily trading volume exceeding $36 billion, faced a major security breach. The recent hack resulted in the theft of nearly $1.5 billion worth of Ether, causing alarm within the crypto community and shaking investor confidence. This incident underscores ongoing concerns about blockchain security and has contributed to the broader sell-off in digital currencies.
The expanding trade tensions initiated by Trump's tariff threats have amplified uncertainties in financial markets globally. As investors navigate this tumultuous landscape, risk-averse behaviors have become more pronounced. The repercussions are evident in the cryptocurrency market's volatility and the significant losses recorded in tech-based equities.
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