- Bitcoin and other major cryptocurrencies saw sharp declines on Monday, as escalating trade tensions stemming from U.S. President Donald Trump's newly imposed tariffs on China, Canada, and Mexico spurred a broader market sell-off.
Bitcoin lost 3.6% to $94,592.0 by 08:04 ET (13:04 GMT).
The cryptocurrency reached an intraday low of $91,69.80, marking its lowest level in three weeks.
"Bitcoin’s price reaction to the latest U.S. tariffs is a reminder that macroeconomic policies don’t just impact traditional markets—they also shape liquidity and risk appetite in crypto," Ran Yi, Co-Founder of Orderly Network (LON:NETW), told Investing.com.
"While short-term volatility is unavoidable, the long-term trajectory of digital assets is driven by broader structural trends, not isolated policy shifts. Crypto markets have weathered far greater disruptions and will continue to adapt as global financial conditions evolve," they added.
Ethereum, the second-largest cryptocurrency by market capitalization, also faced a sharp decline, dropping 18% to $2,567.26, a level not seen since early November.
Bitcoin slips amid broader sell-off after Trump tariffs
The downturn in the crypto market coincides with heightened investor anxiety over a potential global trade war.
President Trump's announcement of a 25% tariff on imports from Mexico and Canada, along with a 10% levy on Chinese goods, has intensified concerns about rising inflation and potential liquidity issues.
These developments have led to a risk-off sentiment across financial markets, with investors moving away from riskier assets, including cryptocurrencies.
Analysts note that the cryptocurrency market, known for its volatility, is particularly sensitive to macroeconomic factors such as trade policies and inflation expectations.
The recent tariffs are anticipated to disrupt global supply chains, potentially leading to higher production costs and consumer prices. This environment of uncertainty and potential economic slowdown has prompted investors to reassess their exposure to digital assets.
Analysts attributed the market turbulence to an impending economic downturn and advised investors to consider acquiring assets at lower prices during this period.
Crypto sell-off after tariffs not surprising, Bernstein says
Bitcoin’s recent decline following the tariff announcement may seem unexpected, given its reputation as an inflation hedge. However, Bernstein analysts suggest that new tariffs have strengthened the dollar and increased inflation expectations, reducing the likelihood of near-term rate cuts. This has tightened global liquidity, pressuring risk assets, including cryptocurrencies.
“In the short term, Bitcoin & crypto markets correlate with risk assets and particularly during weekends, crypto is the only barometer of risk. Thus, crypto sell-off is not surprising,” analysts led by Gautam Chhugani noted.
While Bitcoin’s long-term value proposition remains tied to rising government debt and monetary debasement, analysts emphasize that in the short term, it still moves in line with broader market sentiment unless there is a shift away from fiat currencies.
Bernstein expects Bitcoin to eventually trade on its own fundamentals once the market absorbs the initial risk-off reaction. The firm highlights that Bitcoin has consistently found support in the high $90K range, driven by strong institutional demand.
Crypto price today: most altcoins plunge as US tariffs stike liquidity concerns
Earlier, anticipations of friendlier crypto regulations under Trump’s administration had boosted token prices but the tariff announcement had a greater impact on the market mood.
Most altcoins slumped much more than Bitcoin, reflecting an increased risk-off sentiment.
World no.3 crypto XRP plunged more than 15% to $2,583.38.
Solana slumped 6%, and Polygon tumbled 14.4%, while Cardano declined over 17%.
Among meme tokens, Dogecoin fell over 3%, while President’s meme coin $TRUMP was down 15.5% after reaching a record low of $16.349.