Bitcoin drops under $100000 as Trump tariffs shake markets

Published at: February 3, 2025 3:15 PM

Updated at: February 4, 2025 3:41 AM

Cryptocurrency prices dropped on Monday, with Bitcoin hitting a three-week low and Ether falling to its lowest point since early September. This decline came as concerns over a potential global trade war caused investors to move away from riskier assets.

Bitcoin, the largest and most well-known cryptocurrency, dropped to $94,476.18 on Monday morning in Asia, hitting a low of around $91,441.89. Ether, a smaller cryptocurrency, saw a 24% decrease, returning to levels not seen since early September, trading at $2,494.33.

The price drop came after US President Donald Trump imposed tariffs on Mexican and Canadian imports, as well as a 10% tariff on Chinese goods, effective Tuesday. Canada and Mexico, two of the US's largest trade partners, quickly promised to retaliate, and China said it would challenge the tariffs at the World Trade Organization.

Cryptocurrencies are traded 24/7, including weekends, and have been sensitive to broader market sentiment. Investors are concerned that tariffs could slow down growth, impact company earnings, and lead to inflation.

“Cryptocurrencies are one of the few ways to express risk over the weekend, and in response to news like this, crypto acts as a risk indicator,” said Chris Weston, head of research at Pepperstone.

On top of this, cryptocurrencies have faced downward pressure after a strong rally following Trump's election, as some investors were disappointed by the lack of immediate action to support or deregulate the crypto market under his administration.

Bitcoin reached an all-time high of $107,071.86 on January 20, the day Trump was inaugurated as the 47th U.S. President. Since the election in early November, it has risen 40%, driven by hopes of more crypto-friendly regulations.

Trump, who once referred to cryptocurrency as a scam, showed support for digital assets during his campaign, promising to make the United States the “crypto capital of the world.” Last month, he ordered the creation of a working group to propose new regulations for cryptocurrencies and explore the idea of a national cryptocurrency reserve.