Bitcoin slumped below $80,000 on Friday for the first time since November, while equities diverged following president Donald Trump鈥檚 latest volley of tariffs.
Concerns about the global economy fuelled by fears of a global trade war, coupled with disappointing results this week from AI chip darling Nvidia, have led investors to exit investments seen as risky.
One of the most volatile assets currently is bitcoin, which briefly dived below $80,000 on Friday for the first time since November.
Its low of $78,225.84 was more than 25 per cent off the levels above $1,09,000 touched last month as Trump entered office, and was down 20 per cent in the past week alone.
鈥楾he crypto sector is suffering a bit of a meltdown today,鈥� said Trade Nation analyst David Morrison.
He noted that another popular cryptocurrency, ethereum, has lost nearly half of value since mid-December.
鈥楢ccording to some analysts, that represents not just a correction, but a full-blown bear market,鈥� he added, noting bitcoin has lost most of the gains it made since Trump was elected in November.
Morrison said the gains were driven by hopes of a much friendlier regulatory environment, which have now unravelled to some extent.
City Index and FOREX analyst Fawad Razaqzada said that the broad tech-sector weakness and tariff threats were also putting downward pressure but that $80,000 was a key resistance level.
鈥楢 decisive break below $80K would bring into focus the long-term support area鈥� of around $70,000 he said.
After a relatively upbeat month on equity markets, Trump dealt a fresh blow this week by confirming that 25 per cent tariffs on products from Mexico and Canada would be effective from March 4.
He also announced another 10 per cent hike on Chinese goods would go into effect next week, and warned the European Union that it could be hit with 25 per cent duties.
鈥楾he countdown to Trump鈥檚 tariffs coming into force is now in the final few days and investors have got the jitters,鈥� said Russ Mould, investment director at AJ Bell.
Hong Kong and mainland Chinese stock markets fell sharply Friday, with China hitting back saying further US tariffs would 鈥榮eriously impact dialogue鈥� between the two countries on narcotics control, Trump鈥檚 stated reason to hike tariffs.
鈥楾ariffs are back in the crosshairs, and a market that had reduced its sensitivity to recent tariff headlines has had to reconsider that reaction function,鈥� said Chris Weston, head of research at the broker Pepperstone.
Eurozone stocks fell for a second day, while London edged out a gain after Trump held out the prospect of a 鈥榞reat鈥� trade deal with Britain after meeting with prime minister Keir Starmer at the White House on Thursday.
Wall Street opened mixed on Friday after the US Federal Reserve鈥檚 preferred inflation measure cooled slightly, dipping to 2.5 per cent in the 12 months to January.
eToro US investment analyst Bret Kenwell said the reading 鈥榯akes some of the recent inflation worries off the table鈥� and 鈥榤ay help spark a relief rally in stocks鈥�.
Stocks have struggled in recent weeks with many analysts warning that Trump鈥檚 plans to slash taxes, regulations and immigration will reignite inflation.
A number of weak economic readings have also stoked concerns that the US economy is slowing down.
Tech stocks have also struggled, with shares in Nvidia continuing to be hit by profit-taking despite posting solid results on Wednesday.