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Bitcoin tumbled sharply on Wednesday, erasing much of its recent rebound as U.S. President Donald Trump’s steep trade tariffs officially took effect, triggering a broad selloff across global markets and fueling fears of a full-scale trade war.
Adding to the pressure was a troubling disclosure from Strategy (NASDAQ:MSTR)—the largest publicly listed holder of Bitcoin—which reported a $5.91 billion unrealized loss on its crypto holdings, further dampening sentiment.
Bitcoin Drops Near Six-Month Low as Trade Tensions Rattle Markets
By 01:41 ET (05:41 GMT), Bitcoin fell 4.2% to $76,523.5, after hitting an intraday low of $74,600, placing it within reach of the six-month low it hit earlier in the week. The losses wiped out Tuesday’s short-lived bounce and reinforced the bearish trend, particularly after Bitcoin formed a “death cross” earlier this week—a technical indicator signaling potential further weakness.
The renewed slump came as Trump’s “reciprocal” tariffs officially kicked in at midnight EST, including a massive 104% duty on Chinese imports—a significant escalation from the previously threatened 60%. The move sparked immediate threats of retaliation from Beijing and growing unease among global policymakers, particularly across Europe.
As trade war fears deepened, risk appetite evaporated across asset classes, dragging speculative markets like crypto further into the red. The notion of Bitcoin acting as a hedge against macro risk was also called into question, especially as gold and the Japanese yen surged—traditional safe havens that outperformed Bitcoin amid the turmoil.
Strategy’s $5.9 Billion Bitcoin Loss Weighs on Sentiment
Investor concerns were amplified after Strategy disclosed a $5.9 billion unrealized loss on its digital assets as of March 31, due to a shift in accounting rules that now require changes in the fair value of crypto holdings to be reflected in earnings.
This loss is expected to push Strategy into the red for Q1 2025, marking its first quarterly net loss in over a year. The company also told shareholders that it had neither bought nor sold Bitcoin since the end of the first quarter, despite the price drop presenting potential buying opportunities.
Shares of Strategy slumped sharply following the disclosure, compounding the broader pressure in crypto-linked equities.
Altcoins Follow Bitcoin Lower, Ether Hits Two-Year Low
The broader crypto market moved in lockstep with Bitcoin, extending recent losses as traders remained deeply risk-averse.
- Ethereum (ETH) dropped 7.4% to $1,459.95, its lowest level since 2023.
- XRP slipped 3.2% to $1.8014, nearing a five-month low.
- Solana, Cardano, and Polygon lost between 2% and 3%.
In the meme coin segment, Dogecoin fell 3.5%, while $TRUMP dropped 3.1%, hovering close to record lows.
Outlook: Crypto Sentiment Remains Under Pressure
With Trump’s tariffs now in effect and major global economies preparing countermeasures, the market landscape remains highly uncertain. Crypto assets, which thrive in speculative and risk-on environments, are likely to remain under pressure unless trade tensions ease or macroeconomic sentiment improves.
Traders will also be watching for any signals from the Federal Reserve or other central banks, as expectations for rate cuts and slowing global growth may yet shift the narrative—but for now, the tone remains decidedly risk-off.
