Cryptocurrency markets faced sharp declines following President Donald Trump’s announcement of new tariffs targeting Canada, Mexico, and China.
The tariffs, which include a 25% duty on imports from Canada and Mexico and a 10% tariff on Chinese goods, aim to address trade imbalances, bolster American manufacturing, and combat fentanyl trafficking.
Bitcoin tumbled to $91,441 on Monday, a three-week low, while ethereum dropped to its lowest level since September. The cryptocurrency sell-off saw more than $2 billion in leveraged liquidations over a 24-hour period, with the CoinDesk 20 index falling 19%.
Despite the immediate market reaction, proponents of Trump’s trade strategy argue that the move is necessary to secure America’s economic interests and strengthen domestic industries.
Jeff Park, Bitwise Asset Management’s head of alpha strategies, noted that while bitcoin behaves like a high-risk asset in the short term, Trump’s tariff policy could benefit cryptocurrencies in the long run by weakening the dollar and reducing US interest rates.
The administration framed the tariffs as a multifaceted strategy to address border security and combat the opioid crisis, particularly targeting fentanyl trafficking from China and Mexico. By imposing these measures, the White House aims to encourage fairer trade practices and protect American industries.
While critics warn of potential inflation and supply chain disruptions, supporters believe the tariffs are a necessary step toward long-term economic reform.
Analysts are closely monitoring bitcoin’s key support level at $93,878. A breach of this threshold could push prices toward $80,000. However, seasoned investors note that cryptocurrency markets often experience corrections of up to 30% during bull cycles.
Although short-term market volatility persists, some investors view this as a strategic buying opportunity, anticipating long-term gains as the economy adjusts to the new trade landscape.
