Bitcoin extended its losses on Tuesday, heading for its biggest monthly decline since the cryptocurrency industry suffered a series of corporate failures in 2022. During Asian trading hours, Bitcoin fell 2.64% to $62,858. The decline so far in February has exceeded 19%, which is expected to be the worst monthly performance since June 2022. The collapse of the stablecoin TerraUSD that year triggered a chain reaction that led to the collapse of companies such as cryptocurrency hedge fund Three Arrows Capital and lender BlockFi.
Bitcoin is also headed for its fifth straight monthly decline, which would be its longest losing streak since 2018. 2018 was also a difficult time for the cryptocurrency market, marked by the collapse of the initial coin offering boom.
The weakness in cryptocurrencies comes amid widespread risk aversion in global markets, with U.S. President Donald Trump's announcement of plans to raise global tariffs to 15% unsettling investors and dragging stock markets and other riskier assets lower.
“Trump’s decision to increase global tariffs to 15% has put risk assets under pressure generally, and Bitcoin has also been volatile,” said Rachael Lucas, a cryptocurrency analyst at BTC Markets. "Despite the 'digital gold' narrative, Bitcoin is still considered a risk asset. When macro panic intensifies, funds will move to traditional safe-haven assets. Bitcoin has not yet achieved this status."
IG Australia analyst Tony Sycamore wrote in a research report that Bitcoin is approaching the 200-week moving average of $58,503. Whether it can hold this level as it did in early February will determine whether its price can stabilize.