Crypto Market Bleeds $500B as Trump Tariffs Loom

The crypto market has experienced a significant downturn, with over $500 billion wiped out in the past 24 hours, as investors brace for President Trump's tariff deadline. This decline has been particularly notable for leading crypto assets such as XRP, Cardano (ADA), and Solana (SOL), which have posted double-digit losses.

XRP, which had previously surged over 25% following Trump's proposal to include the crypto asset in the US reserve, has now dropped by 17%. This decline has erased the gains made by the asset, which had reached nearly $3. Similarly, ADA and SOL have experienced significant declines, falling approximately 25% and 20% respectively. ADA, which had surged over 75% to above $1 on Sunday, retreated below $0.8, while SOL declined from $177 to $135.

The total crypto market cap has shrunk by over 12% over the past 24 hours. Bitcoin, after surging past $94,000 on Sunday, has pulled back and is now trading at around $83,700, down almost 10%. The second largest crypto asset, Ethereum, is down around 15%, with plenty of lower cap coins experiencing even steeper declines.

The market downturn has been exacerbated by escalating trade tensions. Trump confirmed that 25% tariffs on Canada and Mexico would take effect on Tuesday, while a 20% tariff on Chinese imports was also announced. These tariffs raise the cost of trade between the US, Canada, and Mexico, potentially hurting businesses and economic growth.

The economic outlook has also darkened, with the Federal Reserve Bank of Atlanta's GDPNow model now projecting a 2.8% decline in gross domestic product for the first quarter of 2025. This contraction could mark the beginning of what some analysts are calling a "Trumpcession," drawing comparisons to the sharp economic decline of 2020. Mounting economic uncertainty and trade war fears have already weighed on financial markets, including the crypto market.