Bitcoin Drops 30% Since January Peak as Trump Tariffs Trigger Crypto Selloff

Bitcoin experienced a significant drop, falling to nearly $75,000 early Wednesday, as President Donald Trump’s sweeping global tariffs took effect. This move triggered a broader selloff in the cryptocurrency market, with Ether plummeting by 10%. The total crypto market capitalization decreased by 6%, extending a 7-day slide to nearly 15%. The tariffs, which included a hike on Chinese goods to 104% and import taxes on over 60 trading partners, marked a major escalation in trade tensions between the world’s largest economies.

Smaller tokens were also heavily impacted, with Berachain’s BERA dropping by 20% and popular memecoins like Bonk, Pepe, and Floki falling by more than 9%. Major altcoins such as Dogecoin, Solana, and Cardano also saw substantial declines, with Dogecoin down 16.3% on the day and Solana and Cardano falling 18% and 23.7% over the past week, respectively. Bitcoin itself is now down roughly 30% since its January peak above $109,000, which occurred right before Trump’s inauguration. This current price represents a major correction from the all-time highs reached earlier this year.

Market liquidations and a surge in bond yields added to the market distress. Approximately $411 million in positions were liquidated over the last 24 hours, reflecting the turmoil in the crypto market. This decline mirrored broader financial market turmoil, with Asian markets opening sharply lower on Wednesday. Japan’s Nikkei 225 fell 2.6% by the midday break, and Australia’s ASX 200 lost 2%. U.S. treasuries extended their selloff, with 30-year yields soaring more than 20 basis points to 4.98%. The 10-year Treasury yield jumped between 4.2% and 4.4% late Tuesday, representing one of its fastest intraday climbs since World War II.

Despite the market downturn, some analysts see a potential buying opportunity for long-term investors. Ryan Lee, Chief Analyst at Bitget Research, suggested that a further drop to $70,000–$75,000 for Bitcoin is possible if trade tensions escalate. However, he also noted that this dip presents a buying opportunity for the long haul. Lee recommends dollar-cost averaging into Bitcoin now, with an eye on altcoins like Solana for higher-risk upside later. He remains optimistic about a recovery to peak prices if the situation improves in the coming months, predicting that Bitcoin could hit $95,000–$100,000 by late 2025, lifting the market cap past $3 trillion again.

The broader crypto market’s recent performance has been closely tied to traditional financial markets, with Bitcoin typically mirroring the ebbs and flows of U.S. markets. Investors worry that a prolonged trade war could weaken global trade, disrupt supply chains, and slow U.S. economic growth. This could further pressure U.S. equity markets and cryptocurrencies. The first Treasury auction of three-year notes following Trump’s new tariff policy witnessed the weakest demand since late 2023, raising concerns about waning foreign investors’ appetite for U.S. government debt as trade tensions escalate.

The economic uncertainty has also reignited discussions about Bitcoin’s potential as an alternative to the U.S. dollar. Some experts believe that Bitcoin may outlast the U.S. dollar as a store of value amid growing economic uncertainty. Bitwise Invest head of alpha strategies Jeff Parks suggested that there is a higher chance Bitcoin survives over the dollar in our lifetime. Bitwise CEO Hunter Horsley shared a similar view, noting that with trust in the U.S. dollar waning and other foreign currencies seen as “even weaker,” investors are left with fewer choices. He argued that gold, typically seen as a safe harbor amid uncertainty, also has drawbacks around shipping and storage.

As trade tensions continue to unfold, all eyes will be on how quickly the U.S. can negotiate new trade deals with its partners. The market is entering a new era of protectionism, and there is still no clarity on where it’s all going to settle. The situation remains fluid, and investors are advised to stay cautious while keeping an eye on potential long-term opportunities in the crypto market.