The crypto market faced a sharp downturn as Trump’s new trade tariffs rattled global markets. Bitcoin fell over 6%, while Ethereum plummeted 27% to $2,135, marking its largest intraday drop since May 2021.
What’s Happening?
Trump’s administration is set to impose new tariffs on imports from Canada and Mexico, potentially disrupting global trade. Additionally, Trump reiterated his threat of imposing tariffs on the European Union, fueling uncertainty in financial markets.
The negative sentiment spilled over into crypto, with altcoins suffering even steeper losses.
“Trump’s trade war is impacting the entire market,” said Carolyn Bower, CEO of BTC Markets. “Concerns over trade wars and stagflation leading to recessions are cascading across altcoins and Bitcoin.”
Crypto’s Sudden Reversal
The recent sell-off marks a stark contrast to the market’s bullish trend, which had been fueled by Trump’s pro-crypto stance during his campaign and after his election victory.
On January 24, Trump signed an executive order creating a task force to provide clear regulations for U.S. crypto companies within six months. The group is also tasked with exploring the creation of a U.S. crypto reserve.
Ethereum Hit Hardest
Ethereum saw a more severe decline than Bitcoin, Solana, and Ripple. According to Jonathan Yark, senior quant trader at Acheron Trading, this is due to expectations that Solana and Ripple will be included in the U.S. crypto reserve.
“Ethereum’s liquidity is far less stable, making it more vulnerable to volatility compared to its peers,” Yark noted.
Market Impact
As of 09:16 AM (UTC+3), Bitcoin traded at $94,000 (-6.28%), having touched a low of $91,672 earlier in the day.
The total crypto market lost approximately $360 billion on Monday, according to CoinGecko data. Even Trump and Melania’s memecoins were not spared, crashing 75% and 90% from their peaks, respectively.
What’s Next?
With uncertainty looming over global markets, all eyes are on how Trump’s policies will shape the future of crypto regulation and international trade.