• Fears are escalating over centralized exchange security after the Bybit hack
• Market uncertainty is growing due to US President Donald Trump’s trade tariffs
• President Trump’s initial crypto promises may have seemed promising, but there’s a growing concern they could become disastrous

According to Unity Wallet’s COO, a combination of factors is behind the current downturn in crypto prices, with Bitcoin experiencing a 7.50% drop to $78,000 in just 24 hours.

This marks a considerable decrease from Bitcoin’s record high of $109,000 in January, achieved in the lead-up to US President Donald Trump’s inauguration.

James Toledano suggests that the post-election optimism surrounding the crypto market might have inflated a bubble, and now, as he mentioned to CoinJournal, “the reality post-inauguration is now setting in – and hard.”

Toledano believes that one key factor contributing to the sliding crypto prices is the recent Bybit hack. Last Friday, this crypto exchange was targeted, resulting in the theft of almost $1.5 billion worth of Ethereum.

This incident has shaken investor confidence, triggering widespread panic withdrawals and a market selloff. Despite Bybit’s CEO, Ben Zhou’s, swift response to the hack, Toledano emphasizes that it has amplified “fears about centralized exchange security vulnerabilities—which only solidifies the case for self-custodial services.”

Dom Harz, the co-founder of BOB (“Build on Bitcoin”), a hybrid Layer-2 solution, shared his perspective with CoinJournal, stating that the Bybit theft serves as a “stark reminder of the industry’s fundamental issues,” and added:

“We’ve been hypnotized by price spikes, memecoin frenzies, and media spectacles, forgetting that crypto was meant to be a new financial system—one built on decentralized protocols that make finance accessible to everyone. Bybit just gave us a $1.5 billion reminder that we are nowhere near that reality.”

Trump’s tariffs

Adding to the market’s woes, the selloff has continued in the wake of President Trump’s trade tariff announcement earlier this week.

During his presidential campaign, Trump made notable promises regarding crypto, declaring his intention for America to become the “crypto capital of the planet.”

Since taking office, he has taken steps that appeared to support this vision, appointing individuals considered pro-crypto to significant government positions, including Paul Akins as the incoming chair of the US Securities and Exchange Commission (SEC). (Mark Uyeda is currently serving as acting chair).

Furthermore, President Trump signed an executive order to establish a crypto working group tasked with providing regulatory clarity. This group is also expected to explore the possibility of creating a national crypto stockpile.

However, despite these seemingly positive developments for the crypto space, Trump’s escalating trade disputes—potentially including a 25% tariff on the EU, a major global trading bloc—are injecting considerable uncertainty into the market.

Toledano suggests that Trump’s tariffs are “harming the global economy” and causing a sense of disappointment among many in the crypto world who had hoped for more consistent support from the US president.

He further commented, “The promise was great, but the reality is potentially proving to be catastrophic. It really makes you wonder if Trump fully grasps how interconnected and increasingly convergent financial sectors are nowadays.”

Biggest economic risk

The third element influencing market prices, according to Toledano, revolves around broader questions concerning the overall governance in the US.

An analysis by Chatham House posits that the most significant economic danger stemming from Trump’s presidency is a decline in confidence in US governance. Their report argues that while some of Trump’s initial policies might seem moderate, actions that undermine the US’s standing and its relationships with international allies could have long-lasting repercussions.

“I don’t often get rattled by the usual ups and downs of the crypto market, but when you factor in the current volatility in traditional equities, it does raise a red flag for concern at the moment,” Toledano concluded.