Cryptocurrency Markets Tumble Amid U.S. Trade War Fears
By Alan Suderman, AP Business Writer
February 3, 2025, 12:06 PM
In a dramatic turn of events, cryptocurrency prices plunged in response to the potential for a trade war between the United States and several of its major trading partners. Following President Donald Trump’s recent tariff announcement, key digital assets experienced notable declines, with some falling by more than 10%.
Bitcoin Drops Below $100,000
The world’s leading cryptocurrency, Bitcoin, saw its value dip below the significant $100,000 threshold. After the announcement from President Trump on Saturday to impose heavy tariffs on goods from Canada, Mexico, and China, Bitcoin’s price fell to approximately $92,000 by Sunday evening. Fortunately for investors, it rebounded to around $99,000 by Monday morning after Trump indicated a pause on the tariffs affecting Mexican imports.
Ripple Effects on Other Cryptocurrencies
The turbulence did not stop with Bitcoin. Other popular cryptocurrencies, including Ethereum and Dogecoin, also faced sharp declines, with some experiencing drops exceeding 10% in value. Notably, Trump’s own meme coin, which he launched shortly before taking office, suffered a significant fall, reflecting the volatility often inherent in such digital assets.
“Those are riskier cryptos than Bitcoin,” remarked Garrick Hileman, an independent cryptocurrency analyst, commenting on the steep price fluctuations. “But it’s a little surprising how big the gap is.”
Global Financial Market Impact
The cryptocurrency sell-off is indicative of a broader downturn in financial markets as concerns mount over imminent tariffs set to take effect. President Trump warned Americans to be prepared for “some pain” as these tariffs materialize, asserting that the costs would be “worth the price” in his pursuit to revitalize American industry.
During a follow-up statement, Trump confirmed that similar import taxes would “definitely happen” with the European Union and may occur with the United Kingdom in the near future.
A Brief History of Bitcoin and Meme Coins
Bitcoin was introduced to the world in 2009 as an alternative form of currency outside the control of traditional banks and governmental systems. Over the years, it has transitioned from obscure beginnings to mainstream acceptance, with its price trends often correlating with tech stock performance.
As for meme coins, they represent a unique and highly volatile segment of the cryptocurrency market. While often originating from a lighthearted or humorous context, the underlying asset can surge dramatically if enough investors choose to buy in. Currently, Trump’s meme coin is trading at approximately $19, which marks a staggering 75% depreciation from its peak price following its launch. First Lady Melania Trump’s newly introduced meme coin is faring even worse, experiencing nearly a 90% decline and currently trading at $1.50.
Trump’s Evolving Stance on Cryptocurrencies
Formerly a skeptic of cryptocurrencies, President Trump has recently adopted a more favorable viewpoint, recognizing digital assets as both a viable personal investment and a crucial aspect of economic policy. He has set the ambitious goal of establishing the United States as the global leader in cryptocurrency, appointing several industry-friendly officials to key positions within the government.
Despite the recent turmoil, the cryptocurrency market has seen significant appreciation since Trump’s election, with Bitcoin trading near its all-time high of $109,000—a testament to the sector’s resilience amid shifting economic landscapes.
As the situation develops, investors are left watching for further announcements from the administration and the resulting impact on the volatile world of cryptocurrencies.
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