Bitcoin dropped by 4% to around $82,000 amid market uncertainty caused by Trump’s trade tariffs. Other cryptocurrencies followed suit, with Solana losing over 9%. Analysts note the return of policy-driven volatility suggests cautious trading ahead, while gold prices surged, emphasizing its haven status. Maintaining Bitcoin above $80,000 is seen as crucial amidst these events.
On Thursday morning in Singapore, Bitcoin experienced a significant tumble, dropping by as much as 4% to approximately $82,000 before recovering slightly. Other cryptocurrencies, including Ether and XRP, followed suit, while Solana plummeted more than 9% at one point. This market jitter was triggered by former President Trump’s shocking announcement of a minimum 10% tariff on all exporters to the U.S., affecting around 60 nations, with China facing a hefty 34% rate.
Initially, the cryptocurrency market seemed unfazed by Trump’s announcement. However, as traders began their day in Asia, the implications of the tariffs began to weigh heavily on digital assets. John Wu, president of Ava Labs, noted that cryptocurrencies often struggle during uncertain periods following announcements like high rates or trade tariffs, as they tend to be seen as risk-on assets.
The traditional stock market also reacted negatively, with the S&P 500 exchange-traded fund (SPY) dipping by nearly 2.5% after the U.S. trading day closed, erasing earlier gains. Many experts predict a short-term decline across markets, not solely due to the tariffs, but because they signify the return of policy-induced volatility.
Rachael Lucas, a crypto analyst at BTC Markets, pointed out that the future of Bitcoin significantly relies on geopolitical changes and whether traders perceive it as a risk or a safe haven. She highlighted that maintaining the $80,000 level is crucial for Bitcoin’s stability, reflecting the heightened uncertainty in the market. Meanwhile, gold reached a record high of nearly $3,160 an ounce, reinforcing its status as a safe haven amidst the turmoil.
The abrupt decline in Bitcoin and other cryptocurrencies amidst trade tariff announcements emphasizes the fragility of digital assets in uncertain times. As traders grapple with policy changes, the market may experience short-term volatility, impacting investor confidence. Keeping a close eye on Bitcoin’s performance at the $80,000 threshold will be essential, and the ongoing geopolitical environment will further define the cryptocurrency’s future status as either risk or refuge.
Original Source: m.economictimes.com
