Trump's Tariffs Spark Crypto Bloodbath: $2B Wiped Out in 24 Hours

President Trump's recent tariff announcements have sent shockwaves through global markets, with the crypto market being no exception. The new tariffs, targeting America's three largest trading partners, have sparked fears of inflation and triggered a wave of liquidations in the crypto market, with over $2 billion wiped out in just 24 hours.

Bitcoin, the world's largest cryptocurrency, has been particularly affected, dropping below $100,000 and reaching its lowest level since early January. Ethereum, the second-largest cryptocurrency, has also taken a hit, falling by 24% to $2,300. The overall crypto market capitalization has shrunk by approximately 8%, with most crypto assets recording double-digit losses within a day.

Analysts believe that Trump's new tariffs could lead to increased demand for Bitcoin as a hedge against inflation. However, many caution that ongoing market volatility may continue to pressure prices downward in the short term. Jeff Park, head of alpha strategies at Bitwise Asset Management, suggests that the implementation of new tariffs could weaken the dollar and create conditions favorable for Bitcoin's growth.

The analyst indicates that the combination of a weaker dollar and lower US rates could create favorable conditions for Bitcoin adoption. As tariffs push inflation higher, affecting both domestic consumers and international trade partners, foreign nations may face currency debasement, potentially driving their citizens toward Bitcoin as an alternative store of value.

Both sides of the trade imbalance will seek refuge in Bitcoin, driving its price "violently higher," Park said. However, it is essential to note that the market reaction to Trump's tariffs is still unfolding, and the long-term impact on Bitcoin's price remains uncertain.