Trump's Tariffs Blamed for $1 Trillion Crypto Market Crash — Is 'Crypto President' Era Over Already?

The cryptocurrency market cap has seen a significant reduction of $1 trillion since December 2024. This massive sell-off was instigated by President Donald Trump‘s proposed tariffs, causing Bitcoin’s price to plunge drastically.

What Happened: The world’s largest cryptocurrency, Bitcoin, fell below $80,000, a 28% drop from its record high of $109,241 in January. Ethereum, the second-largest cryptocurrency, also experienced a sell-off, reaching its lowest price since January 2024.

President Trump, who had labeled himself the “crypto president” during his campaign, announced plans to impose 25% tariffs on Mexico and Canada, starting Tuesday. This announcement led to a shift in investor focus from the risky assets to the potential impact of the proposed levies.

Agne Linge, WeFi’s head of growth, noted that while there are signs of change in crypto enforcement policies, the regional tariff wars and bleak consumer readings have dampened investor sentiments. “Institutional investors appear to be offloading significant Bitcoin holdings, signaling a potential shift in market sentiment,” she told the Insider.

Also Read: EXCLUSIVE: Eric Trump Declares Bitcoin The Future, Details Tax-Free Crypto Goals For Trump Presidency

Despite significant regulatory wins and new leadership at the Securities and Exchange Commission advancing less regulation, a key part of Trump’s agenda, the sector faces macro uncertainty. “These are risk assets, and they respond meaningfully to uncertainty,” said CoinFund President Chris Perkins.

Standard Chartered suggested that Bitcoin could continue its slide through the weekend, given a lack of positive catalysts ahead. Options traders this week had been positioning for Bitcoin to drop to as low as $70,000.

Why It Matters: The recent developments underline the volatility of the crypto market and the significant influence of geopolitical events on investor sentiment.

The proposed tariffs and the ensuing uncertainty have led to a shift in focus from risky assets, causing a significant sell-off in the crypto market.

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