Key Takeaways
- Trump imposed new tariffs on Canada, Mexico, and China.
- Bitcoin dropped below $100K, wiping out over $500 billion in market value.
- Economists warn tariffs could delay Fed rate cuts, impacting Bitcoin.
Bitcoin saw a sharp decline this weekend after Donald Trump signed an executive order imposing new tariffs on key U.S. trading partners.
The decision led to market turmoil, with Bitcoin falling from over $106,000 to below $100,000, erasing billions in value.
New tariff policy
The executive order enforces a 25% tariff on imports from Mexico and Canada and a 10% tariff on Chinese goods, citing fentanyl trafficking as the main justification.
Trump stated:
The sustained influx of illicit opioids and other drugs has profound consequences on our Nation.
These tariffs, set to take effect Tuesday at 12:01 a.m., have already triggered retaliatory measures from affected countries.
International response
Mexico’s President Claudia Sheinbaum announced counter-tariffs, while Canadian Prime Minister Justin Trudeau imposed a 25% tariff on select U.S. goods, warning of further actions that could impact the U.S. energy sector.
Crypto market impact
Bitcoin’s decline also led to a broader market sell-off.
Major altcoins suffered 6-8% losses, and over $500 billion was wiped from the market within 24 hours.
Additionally, more than $700 million in leveraged positions were liquidated, primarily affecting long positions.
Analyst perspectives
Market analysts are divided on the impact.
Bitwise’s Jeff Park remains optimistic, stating:
A sustained tariff war is going to be great for Bitcoin in the long run.
However, Coin Bureau CEO Nic Puckrin warned that risk aversion could push Bitcoin lower, saying:
If markets keep collapsing, it could bring BTC down with it.
Economic outlook
Economists caution that the tariffs could raise consumer prices and inflation, potentially delaying Federal Reserve rate cuts and further pressuring Bitcoin.
