In a turbulent start to the trading week, bitcoin (BTC) and major cryptocurrencies plummeted as Asia markets digested the impact of U.S. President Donald Trump’s aggressive new trade tariffs. The 25% levies on Canada and Mexico, key U.S. trading partners, sent shockwaves through the crypto sphere, reigniting fears of a full-blown global trade war.
Bitcoin Leads Market Rout as Trump Tariffs Bite
By mid-morning Hong Kong time, bitcoin had shed 8%, sliding perilously close to the $93,000 support level last seen in early January. The world’s largest cryptocurrency appeared to stabilize around $93,900 in afternoon trade, but the relief may prove short-lived.
Altcoins fared even worse, with ether (ETH) down nearly 20% to sub-$2,500 levels and Solana’s SOL shedding 7%. Ripple’s XRP took a 23% hit, while the CoinDesk 20 index of top digital assets slumped by 17%. Even President Trump’s own memecoin, TRUMP, couldn’t escape the carnage, tumbling 12% on the day.
Crypto Longs Liquidated as Trade Tensions Mount
The sharp correction triggered a cascade of long liquidations, with over $1.3 billion in bullish bets wiped out in a 12-hour span according to data from CoinGlass. Bitcoin accounted for roughly $300 million of the action, while ether saw $400 million in longs liquidated.
World Liberty Financial, the crypto project backed by the Trump family, also felt the sting. Its $242 million January investments in BTC, ETH, and other digital assets have hemorrhaged over $51 million since the tariff bombshell dropped.
Critics Slam Trump’s ‘Dumbest Trade War in History’
Market observers were quick to pan Trump’s tariffs as a reckless and counterproductive move. A scathing Wall Street Journal editorial dubbed it the “Dumbest Trade War in History,” arguing the levies would do more harm than good to U.S. economic interests.
Tariffs create unnecessary economic disruption and drive inflation. They are hurtful to all sides.
EU spokesperson to Politico
The European Union vowed a firm response to any U.S. duties on its members, while the U.K. sought to avoid the crossfire, angling for a special trade deal. But Trump remained defiant, lashing out at his critics in a weekend Truth Social tirade and insinuating they were funded by China.
Will Cooler Heads Prevail for Crypto Markets?
As the dust settles on the initial panic, crypto traders are weighing the longer-term fallout from Trump’s trade offensive. With global growth already fragile and inflationary pressures mounting, a protracted trade dispute could sap risk appetite and demand for speculative assets like bitcoin.
- Defensive positioning – Stablecoins like Tether (USDT) may see inflows as traders park funds in safe havens
- Bitcoin dominance boost – BTC could outperform alts as liquidity concentrates in the most established names
- Accumulation opportunity – Contrarians may view the dip as a chance to buy BTC at a 25-30% discount from last month’s highs
Much will depend on how the China-U.S. dynamic unfolds in the coming weeks. Any hint of retaliatory measures from Beijing would likely spook the markets anew. Conversely, a dialing down of tensions and return to the negotiating table could see crypto stage a relief rally.
For now, crypto bulls will be hoping the tariff tantrum proves a short-term blip rather than the start of a more serious unraveling. But with a mercurial President Trump at the helm, all bets are off. Bitcoin and its peers may be in for a bumpy ride as the trade saga plays out.
