Bitcoin Plunges 22% Amid Trump Tariffs Fears

Bitcoin, the world's largest cryptocurrency, is poised for its worst month in three years, with a 22% decline as concerns over President Donald Trump's tariffs on major U.S. trading partners fuel fears of faster inflation, reduced chances of interest-rate cuts, and a waning appetite for risky investments. The last time Bitcoin experienced such a significant drop was in June 2022, when it fell by more than a third. This week alone, BTC has plummeted nearly 18%, marking its steepest slide since the week ending November 13 of the same year.

The recent downturn has left investors who purchased Bitcoin this year with substantial unrealized losses. The average purchase price since the start of January is approximately $97,880, and BTC has since dropped below $80,000, leaving average buyers around 18% worse off. Historically, this phenomenon is not entirely uncommon, as investors often face some unrealized losses at the beginning of the year. This occurs when the price of Bitcoin falls below the cost basis of the recipients before recovering later in the year.

On-chain data reveals that realized losses have escalated as the price has fallen. Over the past three days, approximately $1 billion in realized losses have been recorded daily – the highest since August's yen carry trade unwind, when Bitcoin plummeted to $49,000. Furthermore, a staggering $1.1 trillion has been wiped off the crypto market cap, reducing the total to $2.59 trillion, according to TradingView's Total metric.