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President Donald Trump has begun a new trade war with Canada, Mexico, and potentially China, and this has had a significant ripple effect on the broader financial landscape, including the cryptocurrency market. Trump’s latest move involves imposing a 25% tariff on imports from Canada and Mexico, while Chinese imports will be taxed at 10%.
While these tariffs are not expected to directly affect the cryptocurrency market, they have still contributed to broader market volatility. Over the past 24 hours, the entire cryptocurrency market has seen a sharp decline of more than 7%. Bitcoin, the flagship cryptocurrency, has fallen below $95,000, reflecting a more than 5% drop. Ether, the second-largest cryptocurrency by market capitalization, has been hit even harder, suffering a loss of over 17% in the same period, hovering just above $2,500. Other major cryptocurrencies such as Solana, Dogecoin, and Cardano have experienced declines of 16%, 23%, and 24% in the past 24 hours, respectively.
The downturn has extended to crypto stocks as well. Coinbase (COIN-1.54%), the largest cryptocurrency exchange in the U.S., saw its stock drop over 2.5% on Monday. Tesla (TSLA-5.01%), the electric car company led by Elon Musk, which holds over 11,500 Bitcoins, saw a 4.7% decrease in value. MicroStrategy (MSTR+3.24%), the business intelligence firm with the largest Bitcoin holdings among publicly traded companies—444,462 BTC—also saw a 1% dip in its stock price. Other cryptocurrency-related companies, including mining firms like MARA Holdings (MARA-0.99%) and Galaxy Digital Holdings (GLXY), saw their stock prices fall by 3.7% and 1.4%, respectively.
Despite cryptocurrencies not being directly impacted by the tariffs, the broader economic uncertainty and market instability have clearly shaken investor confidence, leading to a significant sell-off in both the crypto and traditional markets. This highlights two trends concerning the expanding cryptocurrency market:
Crypto is highly sensitive to Trump
Since Donald Trump declared himself a “crypto candidate” in 2024 during his election campaign, the cryptocurrency industry has been closely monitoring his every move, paying close attention to his actions and statements. Now that he has assumed office, the crypto market has become highly sensitive to his decisions.
This became evident when Trump announced new tariffs on Canada, Mexico, and China—an announcement that, despite having no direct impact on the crypto market, still sent cryptocurrencies into a sharp decline. The market’s reaction underscores how even unrelated political moves can trigger significant volatility in the cryptocurrency space.
Crypto is mirroring the stock market
Cryptocurrency is steadily becoming more mainstream, and with each passing day, its ties to the broader financial market grow stronger. Whenever there’s a selloff in tech or AI stocks, the crypto market and crypto-related stocks are directly affected. This was evident recently when the DeepSeek-induced selloff of Nvidia impacted the whole crypto market. Additionally, macroeconomic factors continue to play a significant role in shaping the performance of the crypto market. For instance, the latest favorable inflation data led to a boost in Bitcoin’s price above $100,000.