Bitcoin price today: sinks to $82k on tariff woes; set for 20% plunge in Feb

Investing.com-- Bitcoin sank below the critical $80,000 mark on Friday, heading for steep monthly losses as concerns over U.S. tariffs weighed on risk appetite. 

Investor sentiment remained cautious, with traders trimming positions ahead of a key inflation report, though data showed that inflation eased in January. 

The world’s largest cryptocurrency tumbled as low as $78,393.36, before slightly rebounding to $82,216.0 by 09:54 ET (14:54 GMT). 

Bitcoin is poised to decline roughly 20% in February, falling around 24% from its all-time high of $108,000 reached post-President Trump’s election victory. 

The initial surge was driven by optimism surrounding potential pro-cryptocurrency policies. However, recent announcements of impending tariffs and the Federal Reserve’s hawkish stance in December have dampened sentiment, leading to a sustained downward trend over the past six weeks.

Trump tariff fears lead to continued sell-off; PCE inflation eased in January

President Donald Trump reaffirmed the March 4 implementation of 25% tariffs on imports from Mexico and Canada, while also announcing an additional 10% levy on Chinese goods.

The move heightened concerns over global trade tensions, driving investors away from risk-sensitive assets like cryptocurrencies. 

Meanwhile, the market was also focused on the U.S. Personal Consumption Expenditures (PCE) inflation data.

The PCE report showed that inflation edged lower in January, even as concerns grew over President Trump’s tariff policies.

The PCE price index, the Federal Reserve’s preferred inflation gauge, rose 0.3% for the month, bringing the annual rate to 2.5%. Core PCE, which excludes food and energy and is closely watched by the Fed for long-term trends, also increased 0.3% in January but slowed to 2.6% annually from 2.9% in December. Headline inflation dipped by 0.1 percentage point.

The figures aligned with market expectations and suggest the Fed is likely to keep interest rates steady for now.

The report also highlighted unexpected shifts in income and spending. Personal income jumped 0.9% in January, more than double the anticipated 0.4% increase. However, this did not translate into higher consumer spending, which fell 0.2% instead of the expected 0.1% gain.

Meanwhile, the personal savings rate climbed to 4.6%, indicating a more cautious approach by consumers.

Ahead of the report, many Bitcoin holders were reducing their positions to mitigate potential risks associated with a stronger U.S. dollar and possible interest rate hikes. 

Recent sell-off shows why Bitcoin is unlikely to replace fiat and gold: CE

The recent sharp declines in crypto prices show "why cryptocurrencies including Bitcoin remain unlikely to take over from established fiat currencies or usurp gold as the preferred store of value," macro research firm Capital Economics (CE) said in a note.

Even in the event of a sharper price drop, the broader macroeconomic impact would likely remain limited. While the expansion of crypto derivatives markets presents potential risks, regulatory intervention would likely increase if systemic concerns emerge.

“Bitcoin has no intrinsic value, so its worth depends on whether it is likely to become more widely used as a medium of exchange, unit of account or a store of value, thus potentially replacing fiat currencies and/or becoming a ‘digital gold’," Capital Economics said in a note.

However, Bitcoin’s slow transaction speeds and high volatility continue to hinder its adoption as a mainstream payment method. The firm points to El Salvador’s failed 2021 experiment with Bitcoin as legal tender as evidence of these challenges.

If Bitcoin ever posed a serious threat to fiat currencies, central banks would simply accelerate the development of their own digital currencies—though such a shift appears unlikely in the U.S. under a Trump administration.

According to Capital Economics, gold remains the preferred safe-haven asset, given its long-established role as a store of value. The firm remains skeptical that Bitcoin could displace gold, particularly given concerns over its security and regulatory framework.

Crypto price today: most altcoins slump, set for steep February declines

Most altcoins tumbled on Friday, on track for heavy losses for the month, in line with Bitcoin’s movement amid a broader risk-off mood.

World no.2 crypto Ethereum dropped over 6% to $2,166.14 on Friday, and was set to plunge 35% for the month.

World no. 3 crypto XRP lost nearly 4% to $2.10, headed for a 30% monthly decline.

Solana rose more than 5%, and Cardano slumped 7%, while Polygon declined 4.5%.

Among meme tokens, Dogecoin slipped 6.8%, while $TRUMP lost 5.5%.

Ayushman Ojha contributed to this report.