Bitcoin was not spared on Monday as crypto prices took a tumble with the markets reacting to President Donald Trump’s tariff offensive.
The world’s biggest cryptocurrency fell to a three-week low of $91,441,89 overnight with a slight bounce back for Bitcoin to $95,730,35 earlier today.
Lesser crypto tokens have also been slashed, losing 25% in value since Friday which represents the biggest three-day loss since November 2022.
Some investors appear to have been spooked, with others opting to sell off stocks due to the latest play by Trump, in an apparent sign of things to come.
On Saturday, the President confirmed punitive 25% tariffs on Canadian and Mexican goods, in addition to 10% measures introduced against Chinese imports.
The three nations, particularly the near-neighbors of the States, have vowed to retaliate with protective actions.
Trump has said the European Union (EU) could be next to face tariffs but intimated something could be worked out with the United Kingdom (UK).
Donald Trump’s new tariffs, if implemented in full, are likely to tip Mexico and Canada into recession, according to Morgan Stanley analysts. https://t.co/YrBdoZf0fm pic.twitter.com/DgzcsVc2HR
— Financial Times (@FT) February 3, 2025
Bleak outlook if levies are fully implemented
XTB analyst Kathleen Brooks commented, “It’s too early to know exactly what impact tariffs will have on the global economy, but it is fair to say that they have a high potential of triggering inflation, and weighing heavily on global growth, including the US economy.”
She continued, “History tells us that the kernel of the problem with tariffs is that it raises the cost of living, and it provides life support for less productive companies that otherwise would not exist.”
“At this stage in the global trade war, the future looks bleak for the US economy and for elsewhere,” Brooks added.
Overall, CoinGecko data indicated around a quarter of the 100 largest cryptocurrencies, from Bitcoin and beyond, have lost 20% or more in value over the last 24 hours.
Shares in the leading U.S. crypto exchange Coinbase slumped 5.5% in pre-market trading while Trump’s own cryptocurrency ($TRUMP) fell below $20. This is a considerable drop from its initial surge, reaching highs above $73 on January 19.
Image credit: Via Midjourney
