Bitcoin declined on Tuesday, continuing its downward trend and leading broader cryptocurrency losses as risk sentiment worsened due to rising geopolitical tensions and uncertainty over U.S. interest rates.
The drop was also driven by significant profit-taking after Bitcoin reached new highs above the $100,000 mark last week. Traders were seen cashing out across various cryptocurrencies as well.
The world’s largest cryptocurrency fell 2.6%, trading at $96,870.6 by 00:38 ET (05:38 GMT).
Global risk appetite was dampened by escalating geopolitical tensions in the Middle East, particularly after rebel forces ousted President Bashar al-Assad’s government. This contributed to a decline in Wall Street indexes on Monday.
Crypto markets were also affected by profit-taking as traders awaited further clarity on President Donald Trump’s plans for cryptocurrency regulation. Positive sentiment had initially been fueled by Trump’s nomination of pro-crypto figures for key cabinet and regulatory roles, notably Paul Atkins as the potential replacement for SEC Chair Gary Gensler.
However, markets are now looking for more concrete signals on policy, with Trump set to take office in just over a month. The President-elect had vowed to make the U.S. the “crypto capital” of the world, but recent sessions have raised doubts about the level of regulatory support he could offer. Analysts have largely dismissed the idea of a Bitcoin Strategic Reserve under his administration.
In recent weeks, Bitcoin has traded within a range of $90,000 to $100,000, briefly surpassing a record high of over $103,000 last week.Google’s quantum computing breakthrough could pose risks to crypto
Sentiment in the crypto markets was also shaken by Google (NASDAQ:GOOGL) revealing a breakthrough in quantum computing with a next-generation chip capable of solving highly complex problems.
If quantum computing continues to advance, it could threaten the cryptographic security of cryptocurrencies, potentially rendering the processes used to generate crypto tokens much easier to crack.
A study by consulting firm Deloitte suggested that at least $40 billion worth of Bitcoin could be vulnerable to a quantum attack.
Crypto prices today: Altcoins drop alongside Bitcoin
Crypto prices broadly fell on Tuesday, mirroring Bitcoin’s losses.
The second-largest cryptocurrency, Ether, dropped 6.1% to $3,702.02. XRP, the third-largest token, saw a nearly 13% decline to $2.1672. XRP had been one of the best performers in recent sessions, fueled by optimism that the SEC might drop its long-running lawsuit against issuer Ripple.
Solana, Cardano, and Polygon saw losses ranging from 7% to 16%, while meme token DOGE fell 10%.
