Cryptocurrency markets experienced a significant downturn following the announcement of a potential trade conflict between the United States and several key trading nations. This situation has led to substantial declines in the prices of various prominent digital currencies, including the meme coin associated with former President Donald Trump.
Bitcoin’s value began its descent from approximately $105,000 just after Trump disclosed intentions to impose hefty tariffs on imports from China, Canada, and Mexico. By Sunday evening, the leading cryptocurrency dipped to around $92,000 but managed to recover above the $100,000 mark by Monday afternoon after Trump indicated a suspension on the tariffs aimed at Mexican products. A similar announcement followed regarding Canadian imports.
In contrast to bitcoin’s relatively sturdier performance, other cryptocurrencies such as Ethereum and Dogecoin suffered steep declines post-Trump’s tariff declaration. Trump’s meme coin was reported around $19 on Monday, representing a staggering 75% drop from its peak market value shortly after its introduction around the time of his second inauguration.
Garrick Hileman, an independent analyst in the cryptocurrency field, noted that these other digital assets tend to be considered riskier compared to bitcoin, adding that the extent of the price gap is unexpectedly large. The sell-off, alongside the partial recovery, echoed broader fluctuations in global financial markets as the deadline for Trump’s tariffs approached. The former president cautioned that American consumers might experience “some pain” from these tariffs but contended this would be a worthwhile undertaking to enhance U.S. economic strength. He also mentioned plans for import duties on goods from the European Union and potentially the United Kingdom.
Bitcoin, which was launched in 2009 as an alternative to traditional cash systems with no oversight from banks or governmental bodies, has seen its stature evolve from a niche financial asset to a mainstream investment, with its price closely correlating with developments in tech stock markets. Nic Carter, a partner at Castle Island Ventures, expressed that with bitcoin’s increasing acceptance as a serious asset among institutional investors, it has now become exposed to liquidity challenges that larger investors experience.
In the realm of cryptocurrency, meme coins represent a particularly volatile sector, often originating as humorous creations lacking substantial inherent value. However, these coins can experience dramatic rallies if sufficient interest materializes. Notably, several of these coins have encountered steep losses recently; for instance, First Lady Melania Trump’s new meme coin, introduced shortly before Trump’s presidency, is down nearly 90% from its highest recorded value.
Despite his earlier skepticism about cryptocurrencies, Trump has since adopted a favorable stance toward digital currencies, acknowledging their potential as a source of both personal wealth and as a key element of governmental strategy. He has vowed to position the U.S. as the leading nation for cryptocurrency and has appointed various pro-crypto officials to significant roles within his administration. Since his election, cryptocurrencies have experienced a considerable increase in value, with bitcoin price remaining near its all-time high of $109,000.
