Cryptocurrency prices experienced a significant drop on Monday, Bitcoin slid below $100000. As the largest and most recognized cryptocurrency, Bitcoin fell to a three-week low. Ether also faced a decline, reaching its lowest value since early September. The global trade tensions and tariffs imposed by U.S. President Donald Trump have made investors wary, pushing them away from risky assets like cryptocurrencies.
On Monday morning in Asia, Bitcoin was valued at $94,476.18. It briefly touched $91,441.89, marking a significant dip. Ether, on the other hand, decreased by around 24%, dropping to approximately $2,494.33, a level not seen since early September.
The market turmoil followed Trump’s announcement over the weekend of imposing 25% tariffs on most Mexican and Canadian imports and a 10% tariff on goods from China, set to take effect on Tuesday. This move alarmed investors and sparked fears of a global trade war. Canada and Mexico, both major trading partners of the U.S., swiftly promised retaliatory measures. China also stated its intention to challenge Trump’s tariffs at the World Trade Organization.
Cryptocurrencies are traded continuously, including on weekends, and are increasingly sensitive to broader market sentiments. Investors are concerned that these tariffs could harm economic growth and corporate earnings, potentially leading to inflation. Chris Weston, head of research at Pepperstone, noted that “crypto is really the only way to express risk over the weekend,” suggesting that in uncertain times, cryptocurrencies serve as a barometer for investor sentiment.
Additionally, the downturn in crypto prices follows a period of strong performance since Trump’s election. After his inauguration on January 20, Bitcoin reached an all-time high of $107,071.86. The cryptocurrency has increased by 40% since the November election, fueled by hopes for crypto-friendly regulations from the Trump administration.
During his campaign, Trump described cryptocurrencies as a potential avenue for economic growth, even pledging to establish the U.S. as the “crypto capital of the planet.” However, some investors have grown disappointed by the lack of immediate regulatory changes or supportive measures since his inauguration.
In a move indicating a serious approach to the cryptocurrency landscape, Trump established a cryptocurrency working group last month. The group will propose new regulations for digital assets and explore the possibility of a national cryptocurrency stockpile.
As Bitcoin and other cryptocurrencies grapple with the impact of tariffs and shifting market sentiments, investors remain cautious about the future. The evolving landscape of global trade and cryptocurrency regulations will likely play a crucial role in shaping market trends in the coming months, especially as Bitcoin slides below $100000.
