Crypto Stocks Plunge Amid Economic Concerns and Historic $1.4B Hack, MicroStrategy Down 55%

Crypto stocks tumbled on Tuesday as investors reacted to weak U.S. economic data and concerns over a billion-dollar hack targeting a major digital asset exchange.

Stocks of trading platforms Robinhood and Coinbase dropped 8% and 6.4%, respectively. Bitcoin treasury firm Strategy plunged over 11%, while Bitcoin miners Marathon Digital Holdings and Bitdeer saw declines of 9% and 29%, respectively. Bitcoin treasury firm MicroStrategy (MSTR) plunged over 55%, raising questions about potential “forced liquidation” as the company holds a staggering $44 billion worth of Bitcoin.

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The downturn reflected a broader investor pullback from cryptocurrencies and other high-risk assets amid fears of a global trade war, rising inflation, and macroeconomic instability. This sell-off came despite last week’s agreement between Coinbase and the U.S. Securities and Exchange Commission (SEC) to dismiss the regulator’s lawsuit against the exchange, pending commissioner approval. Since then, NFT marketplace OpenSea, trading platform Robinhood, and decentralized exchange Uniswap have all revealed that the SEC is closing investigations into them without pursuing enforcement actions.

Bitcoin was recently trading below $89,000, marking a 7% decline over the past week, according to crypto data provider CoinGecko. The leading cryptocurrency has dropped roughly 17% since reaching its all-time high above $108,000 and briefly fell to nearly $86,000 earlier on Tuesday.

Ethereum, Dogecoin, XRP, and Solana also saw sharp declines earlier in the day but have since regained some ground.

Market turbulence intensified last Friday when Bybit—ranked as the 14th-largest crypto exchange by daily trading volume, per CoinGecko—was hacked, resulting in the theft of $1.4 billion in Ethereum and related tokens. The breach, the largest crypto attack to date, contributed to Bitcoin’s drop below $90,000 for the first time in three months.

Meanwhile, U.S. inflation remains persistent, with the consumer price index (CPI) rising for the fourth consecutive month in January. The 3% annual CPI increase remains above the Federal Reserve’s 2% target, leading the central bank to scale back expectations for multiple interest rate cuts in 2025.

Additionally, market jitters have been fueled by President Donald Trump’s aggressive tariff policies, which he has acknowledged could negatively impact consumers.