Bitcoin and other major cryptocurrencies dipped after President Donald Trump imposed tariffs on US trading partners worldwide, triggering a slump in risk assets.
The largest digital asset fell as much as 4.5% to about $81,770 as of 10:06 a.m. in New York, while other tokens including Ether and XRP also declined. Solana tumbled 10%.
Trump announced Wednesday that he will apply a minimum 10% tariff on all exporters to the US and slap additional duties on around 60 nations with the largest trade imbalances with the US. China will face a 34% rate, while the European Union will have a 20% levy and Japan is seeing a 24% tariff. Cryptocurrencies bore the announcement relatively well at first, but began to falter as traders began their day in Asia and into the start of equity trading in the US.
“As a risk-on asset, cryptocurrencies have generally traded poorly during periods of uncertainty following announcements such as steady high rates or the introduction of trade tariffs,” said John Wu, president at Ava Labs.
Equities tumbled from Asia to Europe to the US as investors were taken aback by the magnitude of the tariffs. US equities and the dollar bore some of the worst selling on speculation the president’s trade offensive will stunt the American economy.
“The market views if growth slides, then traditional risk assets will slide and crypto is correlated to traditional risk assets,,” said Zaheer Ebtikar, founder of crypto fund Split Capital. “Crypto has traded less with gold, which is at all-time high, and more with the broader risk asset space.”
Gold initially rose to a record before reversing the gains. Digital-asset enthusiasts have often framed Bitcoin as a similar kind of refuge for investors, but the original cryptocurrency has looked vulnerable in times of volatility over the past year.
“The next big move hinges on geopolitics, policy shifts, and whether traders see Bitcoin as risk or refuge,” said Rachael Lucas, a crypto analyst at BTC Markets. For Bitcoin, $80,000 is a “must-hold” level, she added.
Meanwhile, crypto-related stocks were also under pressure. Crypto exchange Coinbase Global Inc. fell around 7%, Bitcoin accumulator Strategy dropped 6.7% and miner MARA Holdings Inc. slumped 8.3%.
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