Bitcoin (BTCUSD) fell below $87,000 Tuesday—a sharp drop from the $95,000 level at which it was trading two days ago and the $100,000 mark it tested late last week—as fears about economic uncertainty deepened the sell-off in the cryptocurrency markets.

Bitcoin now down about 20% since hitting an all-time high of $109,000 last month just prior to U.S. President Donald Trump’s inauguration.

Economic Uncertainty Weighing on Bitcoin

After remaining range-bound in recent weeks, bitcoin’s sudden drop may be attributed to increasing worries about U.S. economic factors, especially inflation and trade policies.

In a press conference Monday, Trump reiterated that tariffs on Mexico and Canada will go ahead as planned. Economists have long feared that imposition of tariffs could reignite inflation. Crypto investors will also be watching Friday’s inflation data—known as core Personal Consumption Expenditures (PCE), the Federal Reserve’s preferred inflation metric—for clues after the January Consumer Price Index (CPI) came in hotter than expected.

Persistent inflation would make it harder for the Fed to aggressively cut interest rates, which isn’t great for investors in risky assets such as crypto or stocks. Higher rates imply higher yields on less-risky Treasurys, and that prospect has shaken equity and crypto markets alike.

What Should Investors Do?

Is this sudden drop an opportunity for investors to scoop up bitcoin for a more favorable price? Not really, according to Standard Chartered Global Head of Digital Assets Research Geoff Kendrick.

“DO NOT buy the dip yet, a move to the low $80s is on,” Kendrick wrote in a research note that Coindesk reported Tuesday, adding that, “Before buying the dip is attractive I think we get a $1B [exchange-traded fund] outflow day.”

Investors pulled out money from spot bitcoin exchange-traded funds (ETFs) on Monday, with net outflows recorded at $539 million, according to data from Farside Investors. That’s the second-highest outflow day reported in 2025 and the fifth-largest outflow since these ETFs began trading in January last year.

Kendrick and digital asset manager Bitwise had previously predicted bitcoin would soar to more than $200,000 in 2025.

End of Memecoins?

Non-bitcoin crypto assets have suffered to an even greater extent than bitcoin since Inauguration Day. For example, Solana (SOLUSD), which is where much of the memecoin phenomenon has occurred this cycle, has had its price cut nearly in half since Trump came into office. Recent controversies in the memecoin market have led some market observers to claim this crypto fad is now coming to an end.

“What crypto is digesting right now is the end of the memecoin boom,” Bitwise Chief Investment Officer Matt Hougan posted on X Tuesday, adding that the hype around tokens like Melania and Libra will “kill” the memecoin craze within six months.

Over the past 24 hours, the Libra token is down roughly 20%, the Melania token has lost 23%, and the Trump token has dropped by 11%, according to Coinmarketcap.