The price of bitcoin dropped to its lowest level since the end of 2024 after President Donald Trump imposed aggressive trade tariffs over the weekend.
The cryptocurrency plummeted from $100,000 to as low as $91,000 on Sunday, before stabilising at around $95,000 on Monday morning.
The price of bitcoin has increased significantly since Trump’s election in November, breaking the $100,000 barrier in early December before reaching a high of $108,000 last month.
Now, some speculators are taking their money out of bitcoin following the announcement on Saturday that Trump would be introducing 25 per cent tariffs on Mexico and Canada, and 10 per cent on China.
All three countries pledged retaliatory measures, prompting fears of a trade war, which would affect both earnings and economies.
‘The prospect of a full-blown trade war has spooked investors as they weigh up the prospect of widespread retaliation by countries on the receiving end of Donald Trump’s tariff frenzy,’ says Russ Mould, investment director at AJ Bell.
‘Affected countries aren’t going to take the hit lying down and a tit-for-tat scenario is now looking real. That could result in higher inflation and put a stop to further interest rate cuts for the time being’.
It has led to a flight towards safer assets, like bonds and gold, at the expense of riskier assets like bitcoin and other cryptocurrencies.
Ethereum saw its biggest fall since September, falling 16 per cent to around $2,500, while solana dropped 8 per cent to $196.
Trump’s own meme coin is also down 17 per cent today to around $17.
It marks a sharp turnaround for the asset class that has seen huge growth since Trump’s election.
Bitcoin hit a new high of $108,000 last month, with investors hoping the new administration will embrace cryptocurrencies.
Despite its growing acceptance, particularly since Trump’s election and enthusiasts considering it a good hedge against volatility, cryptocurrencies are still considered a risky asset.
Elsewhere, European markets opened lower on Monday, with the main indices in France and Germany both opening down about 2 per cent, while the FTSE 100 fell 1.2 per cent.
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