Ether, Memecoins Plunge as Traders Shed Risk After Trump Tariffs

The cryptocurrency market has been volatile in recent days, with Ether (ETH) and memecoins experiencing significant losses as traders shed risk following President Donald Trump's tariff announcements. The proposed 25% tariffs on Mexican and Canadian goods, along with a 10% charge on Chinese imports, have sparked concerns about increased inflation and economic uncertainty, leading to a risk-off appetite among investors.



Ether, the second-largest cryptocurrency by market capitalization, has been particularly affected by the market turmoil. After reaching an all-time high of $4,878 in late November 2021, ETH has since experienced a significant correction, falling to around $2,800 at the time of writing. The recent tariff announcements have exacerbated the downward trend, with ETH losing approximately 10% of its value in the past 24 hours.

Memecoins, a class of cryptocurrencies inspired by internet memes and popular culture, have also suffered substantial losses. During the recent memecoin frenzy sparked by Trump's entry into the crypto space, some traders saw massive losses. One trader lost nearly $900,000 on memecoins, while others lost millions on Trump memecoins like TRUMP and MELANIA. The tariffs have further dampened investor sentiment, leading to a sell-off in memocoins and other high-risk assets.

The growing correlation between the S&P 500 and cryptocurrencies suggests that digital asset markets will likely experience volatility similar to that of traditional markets in response to these tariffs. The upheaval precedes a crucial earnings week, with over 120 S&P 500 companies reporting results, which could significantly impact corporate profits and growth expectations for the year ahead.

As the market reaction reflects concerns that tariffs could force the Federal Reserve to maintain higher rates throughout 2025, investors may be more inclined to seek safer havens, such as stablecoins backed by the dollar. This could lead to a temporary shift in investor preferences, with traders favoring lower-risk assets until the market regains its footing.

In conclusion, the recent tariff announcements by President Trump have contributed to the volatility in the cryptocurrency market, particularly for Ether and memecoins. As traders shed risk and seek safer havens, the market may experience further uncertainty and price fluctuations in the coming weeks. However, the long-term prospects for cryptocurrencies remain promising, as the underlying technology and use cases continue to evolve and gain traction.