Trump's Tariffs Spark Global Market Turmoil, Crypto Crash

President Donald Trump's recent tariff announcements have sent shockwaves through global markets, with Nasdaq futures plunging by 2.7% as investors grapple with the escalating trade war. The U.S. President targeted China, Mexico, and Canada with long-threatened import taxes, effective February 1, adding further complexity to the ongoing trade disputes.

The crypto market has also been impacted by these developments, with Bitcoin and altcoins experiencing a significant crash. Bitcoin's price fell by over 5% on February 1, reaching a low of approximately $91,200 before rebounding to around $94,000. This decline has had a cascading effect on altcoins, with Ethereum (ETH) falling by nearly 20%, Ripple (XRP) by 22%, Solana (SOL) by 8%, and Binance Coin (BNB) by over 15%.

The overall global crypto market cap has dropped nearly 12% during the same period, settling at about $3.15 trillion. This market-wide sell-off has been accompanied by a surge in trading volume, suggesting considerable selling pressure or market panic. Bitcoin's recent price crash has also had a significant impact on long-term holders, with many now selling their coins at lower profits than their purchase price or even at a loss year-to-date.

The announcement of new tariffs has sparked concerns about inflation, leading to a $2 billion crypto liquidation. Bitcoin crashed to $92,000, while Ethereum dropped 24% to $2,300. The market turbulence led to $1.7 billion in long position liquidations over 24 hours, with Ethereum traders experiencing $528 million in losses and Bitcoin traders facing $421 million in liquidations.

Analysts believe that Trump's new tariffs could lead to increased demand for Bitcoin as a hedge against inflation. However, ongoing market volatility may continue to pressure prices downward in the short term. The implementation of new tariffs could weaken the dollar and create conditions favorable for Bitcoin's growth, potentially leading to a multilateral agreement similar to "Plaza Accord 2.0" that could reduce dollar dominance and encourage countries to diversify their reserves beyond US Treasuries.