Cryptocurrency Market Plummets Due to Trump's 'Tariff War'... Bitcoin -4%, Ripple -10%

The cryptocurrency market is experiencing a sharp decline. It is interpreted that the trade war between countries, which was anticipated with the inauguration of President Donald Trump, has significantly worsened investor sentiment.

As of 7:10 AM on the 3rd, according to CoinMarketCap, the leading cryptocurrency Bitcoin (BTC) is trading at $97,451, down 3.83% from the previous day. Altcoins have fallen even more. Ethereum (ETH) and Ripple have dropped by 7.27% and 9.71%, respectively, while others like Solana (-5.50%), Binance Coin (-5.63%), Dogecoin (-13.18%), Cardano (-11.64%), and TRON (-7.80%) are also weak.

The decline appeared after U.S. President Donald Trump announced on the 31st of last month that tariffs on Canada, Mexico, and China would be implemented starting February 1st.

On the 31st, President Trump officially signed an executive order to impose tariffs on Canada, Mexico, and China under the International Emergency Economic Powers Act (IEEPA). Tariffs are expected to be imposed starting the 4th.

Canada has also retaliated. Canadian Prime Minister Justin Trudeau announced that a 25% tariff would be imposed on $155 billion worth of U.S. products. Mexico has also taken steps to impose retaliatory tariffs on U.S. products.

These trade disputes between countries are evaluated as potentially exacerbating inflation concerns, which could dim the outlook for interest rate cuts. CoinDesk analyzed that "the renewed trade war, along with policies to deport large numbers of illegal immigrants from the U.S., could exacerbate inflation and make it difficult for the Federal Reserve (Fed) to cut interest rates." It also explained that "the weakness in Bitcoin prices reflects these concerns and signals a risk-averse sentiment in the market."