Major cryptocurrencies fell sharply after the U.S. imposed new tariffs on Canada, Mexico, and China. This trade conflict has triggered a sell-off of risky assets, with Bitcoin hitting a three-week low while memecoins declined dramatically. Previously, the cryptocurrency market showed growth under Trump’s pro-crypto administration, but current trade tensions are causing hesitation among investors.
In a recent downturn, major cryptocurrencies like Bitcoin and Ether witnessed a notable slide following the U.S. government’s announcement of new tariffs on key allies. This economic shift has investors skittish, leading them to exit riskier assets, with Bitcoin hitting a three-week low and Ether reaching its lowest level since September. This instability arises amidst the Trump administration’s protectionist trade policies that impact relations with Canada, Mexico, and China, nations integral to the U.S. economy.
The newly imposed tariffs include a staggering 25 percent on imports from Canada and Mexico and 10 percent on those from China, effective Tuesday. President Trump’s aggressive trade strategy, initially promising a protectionist approach, raises concerns as these nations retaliate. Canada and Mexico have announced similar tariffs against the U.S., while China is preparing to legally challenge these tariffs. Furthermore, Trump plans to impose additional tariffs on the European Union, heightening trade war anxieties.
The timing of Trump’s announcement—on a market holiday for most assets but not for cryptocurrencies—allowed for a quick and observable impact on digital currencies. Bitcoin’s price plummeted from a recent high of over $107,000 to around $94,000 and even dipped to $91,000. Other cryptocurrencies, particularly memecoins, followed suit, with some, like the coins associated with Trump and Melania, plunging by over 12 and 13 percent, respectively. Dogecoin saw a dramatic drop of more than 24 percent in value.
With cryptocurrencies like memecoins being particularly volatile, their declines often reflect shifts in retail investor confidence and risk appetite. These coins, while lacking intrinsic value, can demonstrate significant price fluctuations based on current trends and investor sentiment. Amidst a backdrop of trade disputes, such volatility draws attention to the overall sentiment regarding cryptocurrency investments.
Previously, under Trump’s presidency, there was optimism regarding the crypto market, driven by pro-crypto campaign messaging and the potential influence of prominent advocates like Elon Musk. His appointment of key pro-crypto figures, such as Paul Atkins for the SEC, fostered hopes of a favorable regulatory climate for cryptocurrencies. However, the landscape has shifted dramatically with recent tariff announcements and retaliatory actions from trading partners.
The recent U.S. tariff announcements have cast a shadow over the cryptocurrency market, causing significant drops in major digital assets. With tensions escalating in international trade, both Bitcoin and memecoins are feeling the heat, plunging amidst investor caution. This unpredictable environment poses questions about the future of cryptocurrencies, once buoyed by pro-crypto sentiments in the current administration. The unfolding trade war will likely continue influencing market sentiments, further shaping the pathways for cryptocurrency investments.
Original Source: indianexpress.com
