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Bitcoin tumbled on Tuesday, deepening its losses from the prior session, as excitement over U.S. President Donald Trump’s proposed national cryptocurrency reserve quickly faded.
The broader crypto market also suffered heavy losses, as investor sentiment took a hit from Trump’s tariff hikes on China, Canada, and Mexico, which escalated concerns over a prolonged global trade war.
As of 00:04 ET (05:04 GMT), Bitcoin slid 10.1% to $83,950.0, hovering near a four-month low.
Bitcoin Rally Fizzles as Policy Uncertainty Grows
Bitcoin and other major cryptocurrencies initially surged on Monday after Trump outlined plans for a national crypto reserve that would include Bitcoin, Ether, and three other unnamed cryptocurrencies.
However, enthusiasm quickly waned as details on the reserve’s formation, funding, and regulatory framework remained unclear. While Trump has issued executive orders to explore crypto regulation, the lack of a concrete roadmap dampened optimism.
Adding to the uncertainty, Trump has also backed several crypto projects linked to his brand, including the $TRUMP meme token, which has since crashed from its post-launch highs.
Still, investors are looking ahead to the White House Crypto Summit on Friday, where Trump may reveal more details on his administration’s crypto strategy. The President has also appointed pro-crypto officials to key regulatory positions, signaling a potentially favorable stance toward the industry.
Tariffs Weigh on Risk Appetite, Crypto Extends Losing Streak
Crypto markets have been on a downward trajectory since mid-February, largely due to mounting concerns over Trump’s aggressive tariff policies.
On Tuesday, the U.S. imposed:
- A 20% duty on Chinese imports
- 25% tariffs on Canada and Mexico
While these tariffs do not directly impact crypto, they have weakened overall risk sentiment, leading investors to reduce exposure to speculative assets like Bitcoin.
Broader global financial markets also retreated, with safe-haven assets such as gold and the Japanese yen seeing increased demand.
Market Outlook: Can Crypto Rebound from Losses?
With Bitcoin approaching a critical four-month low, traders will be closely watching:
- Trump’s White House Crypto Summit on Friday, which could provide regulatory clarity.
- Global risk appetite, especially amid rising trade tensions.
- Macroeconomic indicators, including inflation and interest rate expectations.
For now, the combination of policy uncertainty and deteriorating market sentiment continues to weigh on Bitcoin and the broader crypto market.
