It’s been a tough few days for the cryptocurrencies and crypto world. Donald Trump’s tariffs towards Canada, Mexico, and China hit the market hard and continue to do so. He has even warned the European Union that sanctions are on the way.
All of this put a strain on the market, as even Bitcoin got to a three-week low of $91,441.89 at one point.
Altcoins Suffer Deeper Losses
However, altcoins had it even worse, some more than others.
For example:
- SUI dropped by around 14% in the last day or so, with the current price standing at $3.09.
- FET dropped to $0.7354, which is roughly an 18% decrease compared to just one day ago.
- ARB currently sits at $0.4344 – almost a 23% decrease just a day ago.
- TIA and WLD fared the worst, with both decreasing over 23% in value. Their current prices sit at $2.93 and $1.21, respectively.
Tariff Shock Sparks Global Trade Fears
On February 1, 2025, the United States imposed a 25% tariff on imports from Canada and Mexico, and a 10% tariff on Chinese goods. These measures sparked fears of a global trade war, triggering market instability.
In response, Bitcoin, the leading cryptocurrency, dropped below $100,000, and Ether, the second-largest digital asset, fell to $2,494.33—its lowest since early September.
Retaliation and Reduced Liquidity
The imposition of said tariffs has led to swift retaliatory measures from Canada and Mexico, while China has challenged the US actions at the World Trade Organization. This escalating situation has increased market volatility, with investors expressing concerns over potential inflation and reduced global economic growth.
Liquidity shrunk, hitting risk assets like cryptocurrencies and altcoins particularly hard.
While some speculate this is only a short-term hiccup and that a recovery is possible, it’s worth remembering that this was practically all caused by fear, and fear is a powerful driving force.
As such, the worst may not be over yet, leaving us to watch and wait as the market finds its footing.
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