Crypto Plunges as Trade Tensions Flare, Tech Stocks Tumble

Bitcoin and other cryptocurrencies experienced a decline on Monday, with investors reacting to renewed trade tensions and a sharp drop in technology stocks, fueling a broader risk-off sentiment across markets. The world's largest crypto, Bitcoin, fell by 5% to $91,000 by late afternoon in the U.S., its lowest level since February 3, while Ethereum slid by 11% to $2,500, according to CoinGecko data.

The decline in crypto comes as U.S. equities weakened, with the Nasdaq Composite shedding more than 1% amid concerns over artificial intelligence demand and upcoming earnings from chipmaker Nvidia. Investor sentiment also took a hit after U.S. President Donald Trump confirmed tariffs on Canadian and Mexican imports would move forward as planned, reigniting concerns over inflation and economic growth.

Joe McCann, founder of crypto-focused investment firm Asymmetric, told Decrypt that the Trump administration's use of tariff revenue will help offset the fiscal impact of extending tax cuts and limit the addition of trillions to the national debt over the next decade. However, Marco Lim, managing director at Solowin Holdings and founding partner of MaiCapital, dismissed concerns over Trump's tariffs and attributed the market rout to a "risk-off mood" following the Bybit hack, which saw over $1.4 billion in ETH and stETH withdrawn from its hot wallet on Friday.

The Federal Reserve's next move remains a key focus for investors, with expectations for rate cuts later this year still in flux. U.S. Treasury yields edged lower on Monday as markets reassessed inflation risks, but uncertainty over monetary policy and geopolitical developments kept traders on edge.

Analysts Decrypt spoke to said the renewed tariff uncertainty, combined with tech-sector weakness, will continue to weigh on risk assets, including crypto. However, they aren't the largest headwinds on investor's radars. Ryan McMillin, chief investment officer at crypto fund manager Merkle Tree Capital, told Decrypt that ending the war in Ukraine would be more deflationary than tariffs would be inflationary, and the market seems to need more time to decide.

Investors were also wary of Nvidia's upcoming earnings report on Wednesday, with concerns mounting over demand for its AI chips following the emergence of lower-cost alternatives from China. Bitcoin, which often trades in