Trump's Tariffs Spark Crypto Market Rout

President Trump's recent tariff announcements have sent shockwaves through global financial markets, with the crypto market experiencing a significant downturn. The U.S. President imposed 25% import duties on Canada and Mexico, and a 10% tariff on China, sparking a broad risk-off move across markets and pushing the dollar to a near one-month peak.

Bitcoin, the world's largest cryptocurrency, tumbled as much as 10% to $91,695.8, while Ethereum, the second-largest crypto, slumped 22.7% to $2,434.84. The decline in crypto prices followed a 1.5% slump in Wall Street futures, as traders positioned for a renewed trade war. All three targeted countries vowed retaliation, further undermining risk appetite.

The tariffs largely offset the prospect of friendlier crypto regulations under the 47th President. Trump's recent executive order calling for a crypto regulatory framework also sparked little enthusiasm within markets. Analysts warned that Trump's tariffs could drive up inflation and dent U.S. economic growth, while also lessening the prospect of interest rate cuts by the Federal Reserve.

In the aftermath of Trump's tariff announcements, the crypto market experienced a notable decline. Bitcoin's price fell by over 5%, reaching a low of approximately $91,200 before rebounding to around $94,000. The overall global crypto market cap dropped nearly 12% during the same period, settling at about $3.15 trillion. Altcoins also suffered significant losses, with Ethereum falling by nearly 20%, Ripple by 22%, Solana by 8%, and Binance Coin by over 15%.

The market turbulence led to $2 billion in leverage liquidations over 24 hours, with Ethereum traders experiencing $528 million in losses and Bitcoin traders facing $421 million in liquidations. The overall crypto market capitalization shrank by approximately 8%, with most crypto assets recording double-digit losses within a day. XRP and DOGE fell 30%, ADA declined 35%, while SOL and BNB each dropped 15%.

Analysts believe that Trump's new tariffs could lead to increased demand for Bitcoin as a hedge against inflation