Bitcoin Plunges as Trump's Crypto Hype Fades, Tariffs Rattle Markets

Bitcoin's price today slumped to $83,000 as the boost from President Trump's cryptocurrency reserve announcement reversed, and fears of escalating tariffs weighed on investor sentiment. The world's largest cryptocurrency tumbled 10.1% to $83,950.0 by 00:04 ET (05:04 GMT), extending losses from the previous session and nearing a four-month low.

Earlier this week, markets had rallied on news that Trump planned to include Bitcoin and other cryptocurrencies in a national crypto reserve. However, uncertainty surrounding the details of this reserve and Trump's broader crypto policies quickly soured enthusiasm. The lack of clarity on how the reserve would be formed and funded, along with Trump's history of launching cryptocurrencies that have since crashed in value, contributed to the reversal in sentiment.

Adding to the market's woes, Trump imposed steep tariffs on China, Canada, and Mexico, escalating a global trade war. This move rattled risk appetite and led investors to shy away from speculative assets, including cryptocurrencies. Broader global financial markets also retreated, while safe havens such as the Japanese yen and gold saw increased buying.

Cryptocurrencies across the board suffered heavy losses on Tuesday, with major altcoins reversing all gains made on Trump's reserve announcement. Ether, the world's second-largest cryptocurrency, slid 14% to $2,106.28. XRP, Solana, Cardano, and Polygon also experienced significant declines, ranging from 16% to 23%. Meme tokens, such as Dogecoin and $TRUMP, also plummeted, with $TRUMP coming back in sight of record lows.

As the market awaits further clarity on Trump's crypto policies, investors remain cautious. The first White House Crypto Summit is scheduled for Friday, where Trump may provide more details on regulation. Additionally, the U.S. President has named pro-crypto appointees for key regulatory positions, which could potentially influence the market's trajectory in the coming weeks.