Market update: Trump declares trade war - Bitcoin & crypto fall
Following US President Donald Trump's announcement to impose new tariffs on Canada, Mexico and China, Bitcoin, altcoins and large parts of the financial market collapsed.
Following US President Donald Trump's announcement to impose new tariffs on Canada, Mexico and China, Bitcoin, altcoins and large parts of the financial market collapsed.
Trump had announced these measures for months during his election campaign, and now he has made them reality. On Saturday, the Republican president signed a presidential decree decree that will come into effect on Tuesday, February 4.
High rates for neighboring countries and China
In concrete terms, this means that Canada and Mexico are confronted with import duties of 25%. Products entering the US from China are subject to an additional 10% duty.
According to the official statement from the White House, these measures are intended to combat the illegal importation of drugs, such as fentanyl, and human trafficking. Trump had previously given these countries a deadline of February 1 to take action against this.
All three affected countries have now announced that they are taking countermeasures. In response, Trump's decree threatens further increases in import tariffs.
Markets plummet after the announcement
After the announcement, broad parts of the financial market fell. The Nasdaq 100 lost almost 2.5%, while the S&P 500 fell about 2%. The crypto market was hit even harder.
Bitcoin temporarily fell to $91,178, a drop of almost 14%. At the time of writing, BTC managed to recover somewhat and break the $96,000 barrier again.
The losses in the altcoin market were even sharper. Among the ten largest cryptocurrencies, price declines usually ranged between 14 and 24%. Only Solana (SOL) and Tron (TRX) held up relatively, down about 8%.
The total market capitalization of the crypto market shrank by about 10%. In the past 24 hours, according to Coinglass, $2.24 billion worth of positions were liquidated, with investors with long positions (who speculated on rising prices) particularly hit hard. In this category alone, $1.88 billion went up in smoke.
Bitcoin as a safe haven?Raising import duties is often seen as a factor that can fuel inflation, as companies typically pass on the additional costs to consumers.
Yet Bitwise analyst Jeff Park also sees positive sides to the situation. According to him, Bitcoin will not only rise, but also faster than before. He expects that rising inflation will encourage investors to protect their wealth by investing in alternative assets such as Bitcoin. His full analysis can be read View post on X.
