Crypto Markets Struggles as Trump’s Tariff Moves Shake Investor Confidence

Crypto Markets Struggles as Trump’s Tariff Moves Shake Investor Confidence

Cryptocurrency prices experienced major swings this week after President Donald Trump announced new tariffs on key U.S. trading partners. The announcement created concerns about global trade tensions and inflation, causing several digital assets to drop in value. Although bitcoin recovered some of its initial losses, a number of other cryptocurrencies continued to struggle.

The news of tariffs came on Saturday when the White House put extra duties on goods entering the country from Canada, Mexico, and China. Market analysts say this move made investors less willing to hold riskier assets, which led them to sell digital currencies. One o the reasons for the sell-off is the concern that higher import prices will push inflation up. If that happens, the Federal Reserve might be less inclined to cut interest rates. Higher borrowing costs can make cryptocurrencies less appealing.

Bitcoin’s Dip and Recovery

Bitcoin fell from around $105,000 on Saturday to roughly $92,000 on Sunday night. By Monday, it rose above $100,000 again, partly because Trump announced a pause on tariffs aimed at Canada and Mexico. It remains below its recent peak of about $109,000, which it reached shortly before Trump’s inauguration last month. However, bitcoin’s rebound was stronger than many other tokens.

Bitcoin Price February 4

Traders and analysts have pointed out that bitcoin tends to move in a similar manner to technology stocks. When markets become uncertain, investors sometimes shift funds away from assets with high volatility. A cryptocurrency researcher, Garrick Hileman, commented on the differing performances among tokens, saying, “Those are riskier cryptos” when referring to smaller, newer digital currencies compared to bitcoin.

Altcoins and Meme Tokens Face Bigger Losses

Several altcoins suffered steeper losses than Bitcoin. Ethereum dropped by a significant percentage, making investors to reevaluate their positions. Meme coins, which often rely on online excitement for their value, took the biggest hits. Trump’s own meme coin,lost 70 percent from its highest point. Another token associated with First Lady Melania Trump declined even more in percentage terms.

Crypto executives note that meme coins can be highly volatile because they lack practical use cases. The sharp price fluctuations highlight the high risks associated with them. As one industry insider stated, when there is fear and uncertainty, investors leave assets they view as less stable.

Impact on Crypto Companies

Stocks linked to cryptocurrency also felt the pressure. Coinbase, a major U.S.-based exchange, and other publicly traded businesses with large bitcoin holdings or mining operations saw declines in early trading. Some recovered part of their losses by the end of Monday, but the overall trend was negative compared to recent weeks.

Before the tariff announcement, many cryptocurrency holders had hoped for a more favorable regulatory environment under Trump. They pointed to his campaign promises to support digital assets and his promises to make the U.S. a leading crypto hub. Trump’s administration even introduced initiatives to boost crypto use across several government agencies.

Yet, the tariff news changed those efforts, reminding investors that global market forces can hit digital currencies just as like as traditional stocks. One investor, Tyler Hogge mentioned, “Trump said no one has to pay taxes on gains in crypto and then got rid of all the gains,” suggesting the gains disappeared with the market reaction.

Looking Ahead

Despite the turbulence, crypto supporters remain optimistic about the long-term potential of digital assets. They note that even with recent dips, bitcoin’s overall price is still relatively high compared to where it stood in past years. However, with further tariff moves possible and key trading relationships on uncertain ground, investors are preparing for more volatility in the weeks ahead.

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