"Global Markets Plummet as Trade Tensions Escalate"

Stock Market Crash: Global Markets Drop on Tariff Concerns

Global markets have experienced a significant downturn in response to escalating trade tensions and the imposition of tariffs by the United States on key trading partners. The crypto market, once seen as a safe haven, has not been spared from the volatility, with Bitcoin and other major cryptocurrencies plummeting in value.

President Trump's decision to impose 25% tariffs on imports from Canada and Mexico, and a 10% levy on Chinese goods, has rattled industries from agriculture to automotive. The move has drawn sharp criticism from economists and global leaders, with The Wall Street Journal editorial board labeling it the "Dumbest Trade War in History."

The tariffs have disrupted North American trade relations, with both Canada and Mexico threatening retaliatory measures. This has led to broader economic instability, as higher tariffs could increase costs in sectors such as automotive and agriculture, leading to further market uncertainty.

Cryptocurrencies, once viewed as a hedge against market volatility, have shown increasing sensitivity to macroeconomic developments. Bitcoin's price has fallen in response to the tariffs, with analysts suggesting that the new duties have strengthened the dollar and raised inflation expectations, making near-term interest rate cuts less likely. This has tightened global liquidity, weighing on risk assets, including cryptocurrencies.

Despite the short-term correlation with risk assets, analysts maintain that Bitcoin has a long-term compounding history that showcases its relative value, especially as governments accumulate more debt and deficits, leading to monetary debasement. However, they note that there is no evidence of Bitcoin being uncorrelated with the market in the short term unless there is a flight to safety from fiat currencies.

Bitcoin's movement remains in line with previous analysts' predictions of a "local top" above $110,000 in January, before a deeper retracement. Bitcoin has consistently held support in the high $90K range after recent sell-offs, bolstered by strong institutional demand.

In January 2025, Bitcoin ETFs recorded a net inflow purchase of $5.3 billion, aligning with the annual forecast of approximately $70 billion in inflows. MicroStrategy continued its Bitcoin acquisition strategy, purchasing around $2.5 billion worth of Bitcoin and issuing $584 million in