Bitcoin’s value drops below $100,000 following Trump’s tariffs shake-up in market
On Monday, cryptocurrency prices took a hit, with Bitcoin dropping to a three-week low and Ether reaching its lowest point since early September. The market instability was attributed to the looming threat of a global trade war, which made investors wary and caused them to retreat from risky assets.
Bitcoin, the most prominent cryptocurrency globally, fell to US$94,476.18 in Asian markets, hitting a low of around US$91,441.89. Meanwhile, Ether, a smaller digital currency, experienced a significant 24 percent drop, falling to levels not seen since early September and settling at US$2,494.33.
The decline in cryptocurrency prices was linked to the recent actions of US President Donald Trump, who announced 25 percent tariffs on imports from Mexico and Canada, as well as 10 percent tariffs on products from China. The immediate response from Canada, Mexico, and China promising retaliatory measures, coupled with China’s plan to challenge Trump’s levies at the World Trade Organization, added to the market volatility.
In the cryptocurrency market, prices are influenced by broader market sentiments, and the recent trade war developments have created concerns among investors. The fear is that tariffs could negatively impact economic growth, corporate earnings, and lead to inflation. As a result, cryptocurrencies have become a way for investors to gauge risk during weekends and major news events.
Chris Weston, the head of research at Pepperstone, emphasized that cryptocurrencies have become a proxy for risk, particularly during volatile periods like the trade war announcement. Additionally, the market for digital assets faced downward pressure following a strong rally post-Trump’s election, as some investors were disappointed by the lack of immediate supportive measures for cryptocurrencies or regulatory changes.
Despite Trump’s earlier skepticism towards cryptocurrencies, labeling them as a scam, he embraced digital assets during his presidential campaign. Trump even pledged to establish the United States as the “crypto capital of the planet.” In response to growing interest in cryptocurrencies, Trump ordered the formation of a cryptocurrency working group to propose new regulations for digital assets and investigate the development of a national cryptocurrency reserve.
Overall, the recent slide in cryptocurrency prices can be attributed to the uncertainty surrounding global trade tensions and the impact of tariffs on the broader economy. The market volatility highlights the sensitivity of cryptocurrencies to external factors and underscores the role of digital assets as a risk indicator during uncertain times. Investors will continue to monitor market developments and news events for further insights into the future trajectory of cryptocurrencies.
