Crypto market loses $300B as tariff wars spark sell-off
What's the story
The cryptocurrency market has taken a massive hit, losing $300 billion in value in a single day. The crash comes after a day of growth driven by Donald Trump's announcement of US Crypto Strategic Reserves. Bitcoin fell nearly 10%, while major altcoins such as Ethereum (ETH), Solana (SOL), and XRP lost over 15%. The steep fall was triggered by Trump's sweeping tariffs on China, Mexico, and Canada, which unsettled financial markets and triggered a global sell-off.
Market impact
Bitcoin's value and market cap take a hit
Earlier today, Bitcoin traded at $84,119.28 with a market cap of $1.67 trillion and a 24-hour trading volume of $76.75 billion. Over the past day, BTC has fallen by 9.47%, slipping from a daily high of $93,600 to a low of $83,300. Other major cryptocurrencies also witnessed steep declines with Ethereum (ETH) down by 11%, Solana (SOL) plunging by 15%, XRP falling by 12%, and Cardano (ADA) crashing by an unprecedented 20%.
Market response
Trump's tariffs cause ripples in US equities
Notably, the crypto crash coincided with a sharp downturn in US equities. The S&P 500 slid by 2%, while the Dow Jones plunged 650 points during Monday's session. This was triggered by Trump's new 25% tariffs on imports from Mexico and Canada, along with doubling duties on Chinese goods to 20%. China responded swiftly, announcing its own tariffs on select US imports, effective March 10, reigniting fears of a global trade war.
Market manipulation?
Analysts question Trump's crypto reserve announcement
Despite presenting himself as a 'crypto-friendly President,' analysts are wondering if Trump's latest moves constitute market manipulation. Critics allege that his crypto reserve announcement sparked an artificial rally, enabling insiders to cash in before the inevitable crash. Economist Peter Schiff accused Trump of orchestrating "the biggest crypto pump-and-dump scheme of all time," and demanded a Congressional investigation into the matter.
Market outlook
Uncertain future for cryptocurrency markets
With Trump's tariffs shaking global trade, the near-term outlook for crypto remains uncertain. If regulatory approval for the US Crypto Strategic Reserves faces roadblocks, further volatility is likely. For now, investors are bracing for what could be one of the most unpredictable chapters in cryptocurrency markets' history. The overall cryptocurrency market capitalization has fallen by 10%, now standing at $2.77 trillion, erasing Monday's gains and leaving investors cautious amid mounting economic uncertainty.