Trump’s Tariff War Is Rattling the Crypto Market

The negative sentiment in markets weighed on other cryptocurrencies, with Bitcoin at one point down nearly 6% and smaller tokens posting even steeper losses.

The imposition of Trump’s tariffs on billions of dollars worth of goods imported by the US from Canada and Mexico is expected to disrupt global trade. Trump has also threatened to impose tariffs on the European Union.

The negative market sentiment impacted other cryptocurrencies as well, with Bitcoin briefly experiencing a decline of nearly 6% and smaller tokens incurring even steeper losses.

“Trump’s tariff war is affecting the entire market,” said Caroline Bowler, chief executive officer of BTC Markets. “Concerns about trade wars and stagflation, leading to recessions, are spreading rapidly across alt coins and Bitcoin.”

Sharp Reversal

The crypto market gyrations mark a sharp departure from recent gains, which were largely attributed to Trump’s pro-crypto statements during his campaign and after his election. On Jan. 24, the Republican signed an executive order to establish a working group that will develop clear regulations for US crypto firms within six months. The group will also examine the creation of a crypto stockpile.

“Ether is experiencing more turbulence than Bitcoin, Solana and Ripple primarily because there is anticipation that the latter are likely to be included in a digital asset stockpile in the US, led by American companies,” said Jonathan Yark, senior quant trader at market maker Acheron Trading. “As a result, Ether’s liquidity is far less resilient and subject to increased volatility compared to its peers.”