Cryptocurrency prices fell sharply on Monday as fears of a trade war rattled investors, causing a broader selloff across financial markets.
Bitcoin dropped to a three-week low of $91,441.89 overnight and was trading at $95,730.35 at 0941 GMT, down 6.2% on the day.
Ether, the second-largest cryptocurrency, has lost nearly 25% of its value since Friday, marking its steepest three-day decline since November 2022. It was last trading at $2,592.14.
The downturn followed U.S. President Donald Trump’s decision to impose 25% tariffs on imports from Mexico and most Canadian goods, along with a 10% levy on Chinese products, set to take effect on Tuesday. Canada and Mexico, the top two U.S. trading partners, quickly vowed to retaliate, while China announced it would challenge the tariffs at the World Trade Organization (WTO).
The broader cryptocurrency market suffered steep losses, with almost a quarter of the 100 largest cryptocurrencies losing at least 20% in value over the last 24 hours, according to CoinGecko data. Shares in U.S. crypto exchange Coinbase fell 5.5% in pre-market trading. Meanwhile, Trump’s own cryptocurrency, $TRUMP, slipped below $20, a sharp decline from its January 19 peak of $73.
The cryptocurrency market, which trades 24/7, has reacted swiftly to growing economic uncertainty. The risk of higher costs, slower growth, and inflation due to tariffs has weighed on investor sentiment.
Bitcoin, which had surged to a record high of $107,071.86 on January 20, the day Trump was sworn in, is still up 40% since early November amid expectations of crypto-friendly policies from the new administration.
Since taking office, Trump has ordered the creation of a cryptocurrency working group to propose new digital asset regulations and explore the possibility of a national cryptocurrency stockpile. However, some investors remain disappointed by the lack of immediate policy changes to boost the sector.
Despite the recent volatility, industry experts anticipate continued growth in the cryptocurrency market in the long term, with regulatory clarity and a shifting economic landscape expected to shape future trends.
