Trump's Tariffs war shakes Crypto market, Bitcoin falls

Cryptocurrency prices slid on Monday, with bitcoin at a three-week low and ether at its lowest since early September, as the spectre of a global trade war put investors on edge and pushed them out of risky assets.

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03 February 2025

EghtesadOnline: Bitcoin’s price plunged below $100,000 after new tariffs were imposed on key trade partners by US President Donald Trump. Investors reacted swiftly to the news, and cryptocurrency markets saw significant volatility. On Monday morning in Asia, Bitcoin dropped nearly 7%, reaching a three-week low around $93,543. Meanwhile, Ethereum (ETH) fell by 18% since yesterday, returning to price levels not seen since early November. The sharp decline marked a period of unease in the cryptocurrency sector, which has become increasingly sensitive to broader economic shifts.

Trump’s decision to impose a 25% tariff on imports from Mexico and most Canadian goods, as well as a 10% tariff on Chinese imports, took effect on Tuesday. This development rattled global markets, causing a pullback in risky assets, including cryptocurrencies. Since cryptocurrencies trade 24/7, their prices adjusted quickly in response to the economic uncertainty stemming from the tariffs.

Cryptocurrencies React to Economic Uncertainty

The cryptocurrency market’s response to Trump’s tariff announcement underscores the sector’s sensitivity to global economic events. According to market analysts, tariffs can have far-reaching implications. They could contribute to inflationary pressures and higher interest rates, deterring investors from risk assets like crypto.

Chris Weston, head of research at Pepperstone, highlighted how cryptocurrencies have become a “risk proxy” in times of market uncertainty. He explained, “Crypto is really the only way to express risk over the weekend, and on news like this, crypto resorts to a risk proxy.” Weston’s comments underscore the growing role of digital currencies as a barometer for broader market sentiment, particularly during volatile periods.

Bitcoin, Ethereum, and Solana Prices Decline

Bitcoin’s price, in particular, took a significant hit, dropping to $93,543.49 (A$153,700), representing a 4.8% decline within the last 24 hours. According to CoinGecko data, BTC was down 4.6% compared to its value seven days prior. The global cryptocurrency market felt the brunt of the tariffs, with key digital currencies following Bitcoin’s lead. / Mehr