Cryptocurrency prices took a hit on Monday, with Bitcoin falling to a three-week low and Ether dropping to its lowest level since early September. The downturn came as global trade tensions heightened, triggered by new tariffs imposed by the U.S., which pushed investors to move away from riskier assets like cryptocurrencies.
Bitcoin, the world’s largest and most widely recognized cryptocurrency, slid to $94,476.18 early on Monday in Asia. It touched a low of $91,441.89 during the morning session, marking its lowest point in three weeks. Smaller cryptocurrencies were also hit hard, with Ether dropping by approximately 24%, falling to $2,494.33, levels not seen since early September.
The recent slide in crypto prices follows a weekend of escalating trade war fears after U.S. President Donald Trump announced new tariffs on imports from Mexico, Canada, and China. Starting Tuesday, the U.S. will impose a 25% tariff on Mexican and Canadian imports and 10% on goods from China. In response, Canada and Mexico vowed retaliatory measures, while China said it would challenge the tariffs at the World Trade Organization.
Cryptocurrencies, which trade around the clock, including on weekends, have recently shown sensitivity to broader market sentiment. As concerns over the global economy and trade disruptions rise, many investors view cryptocurrencies as a risky asset to avoid. Experts suggest that news of tariffs and potential trade wars often triggers a risk-off sentiment, with investors pulling out of riskier assets.
“Crypto is really the only way to express risk over the weekend, and on news like this, crypto resorts to a risk proxy,” said Chris Weston, head of research at Pepperstone. He explained that these developments are contributing to downward pressure on cryptocurrencies, particularly after a strong rally following Trump’s election.
Bitcoin had seen a significant rally in late 2017 and early 2018, touching a record high of $107,071.86 on January 20, 2018, when Trump was inaugurated as the 47th President of the United States. The cryptocurrency market had soared by 40% in anticipation of crypto-friendly regulations from the new administration.
However, the lack of immediate action to ease regulatory pressures on the digital asset space has led to disappointment among some investors. Despite Trump’s campaign promise to make the U.S. the “crypto capital of the planet,” his administration has yet to implement significant measures to foster the growth of digital currencies.
Last month, Trump signed an executive order to form a cryptocurrency working group tasked with proposing new regulations for digital assets and exploring the creation of a national cryptocurrency. However, the ongoing uncertainty in global trade, coupled with lackluster policy action, is now contributing to volatility in the cryptocurrency market.
