Bitcoin and Cryptos Plunge as Trump’s Tariffs Stoke Risk Aversion

Cryptocurrency markets tumbled sharply on Monday, as risk appetite took a hit following U.S. President Donald Trump’s decision to impose new trade tariffs on China, Canada, and Mexico.

Market Impact:

• Bitcoin (BTC) plummeted 10% to $91,695.8
• Ethereum (ETH) slumped 22.7% to $2,434.84
• $TRUMP memecoin, launched by Trump in January, hit a record low of $16.349 after a 15% drop

What Triggered the Sell-off?

The decline in cryptocurrencies mirrored a broader risk-off move in financial markets, with:

• Wall Street futures falling over 1.5%
• U.S. dollar surging to a one-month peak as a safe-haven asset
• Gold seeing modest gains amid uncertainty

Trade War Fears Weigh on Sentiment

• Trump’s 25% import duties on Canada and Mexico and 10% tariffs on China triggered retaliatory threats from all three nations
• Investors feared higher inflation and slower U.S. economic growth, dampening expectations for Federal Reserve interest rate cuts

Crypto Regulation Hopes Fizzled

While Trump had signaled a friendlier stance toward crypto regulation, his recent executive order for a regulatory framework failed to excite the market. Instead, concerns over macroeconomic uncertainty and hawkish monetary policy weighed on crypto sentiment.

Looking Ahead:

With global trade tensions rising, risk-sensitive assets like Bitcoin and Ether could remain volatile. Traders will watch for further geopolitical developments and any signals from the Federal Reserve regarding its stance on rate cuts amid inflationary pressures from tariffs.