Bitcoin, Ethereum, and a wide array of cryptocurrencies are experiencing significant price downturns, reaching levels we haven’t seen in some time. This dramatic shift is primarily influenced by broader macroeconomic factors, sparking a sell-off frenzy among crypto traders.
Why Are Bitcoin, Ethereum, and the Crypto Market Crashing Today?
According to CoinMarketCap data, the cryptocurrency market has plummeted by more than 10% in just the last 24 hours. Bitcoin alone has nosedived over 6%, sliding to a low of $9,200, while Ethereum has taken a sharper hit with a 20% drop, sinking to nearly $2,400. This downturn coincides with fresh tariffs introduced by U.S. President Donald Trump on Mexico, Canada, and China.
Over the past weekend, Trump declared a 25% tariff on imports from Mexico and Canada, along with a 10% tariff on Chinese imports. He has also hinted at potential tariffs on the European Union. In retaliation, Mexico and Canada have slapped back with their own tariffs against the U.S., and China has signaled its intention to respond similarly.
These moves have stirred up fears of a trade war, which spells trouble for risk-sensitive assets like Bitcoin, Ethereum, and other digital currencies. Such economic tensions could detrimentally impact the affected nations, stoking fears of stagflation and recessions. With this looming uncertainty, traders are scrambling to sell their crypto holdings.
Robert Kiyosaki, a well-known finance author and expert, had forewarned of an impending crash in the crypto market attributed to these tariff tensions. Yet, he also sees this as a buying opportunity rather than a cause for panic. He argues that the fundamental issue lies in mounting debt, which will likely exacerbate. Therefore, he anticipates that cryptocurrencies will appreciate in value over time.
There’s also a lingering risk of further sell-offs in Bitcoin, Ethereum, and the wider crypto sphere, which will largely depend on how the stock market responds to these new tariffs. Adding to this is the role of institutional investors, who are heavily invested in Bitcoin and Ethereum through exchange-traded funds (ETFs). Should they begin unloading their shares, it could trigger another wave of sell-offs.
Donald Trump Faces Criticism
The crypto community has not held back in its criticism of Donald Trump, who has unwittingly contributed to the current downturn affecting Bitcoin, Ethereum, and the broader crypto market. Even before these recent events, there was a prevailing bearish sentiment, exacerbated by the president’s hesitancy to establish a strategic Bitcoin reserve.
Trump did issue an executive order that raised the prospect of a national crypto stockpile, but according to industry analysts like Alex Thorn, Head of Research at Galaxy Digital, this initiative falls short of becoming a strategic reserve. Moreover, Trump has faced backlash for launching his TRUMP meme coin, which many believe has siphoned liquidity away from Bitcoin, Ethereum, and the broader crypto market.
Featured image sourced from Unsplash, with chart courtesy of Tradingview.com.
