Bitcoin, Ethereum, and the broader crypto market have experienced massive price crashes, dropping to levels not seen in a while. This development is due to macroeconomic factors which have sparked a wave of sell-offs among crypto traders.
Why Bitcoin, Ethereum, And The Broader Crypto Market Is Crashing Today
CoinMarketCap data shows that the crypto market has dropped by over 10% in the last 24 hours. Specifically, Bitcoin has crashed by over 6% and dropped to as low as $92,000, while Ethereum has crashed by 20% and dropped to as low as $2,400. This price crash follows US President Donald Trump’s tariffs on Mexico, Canada, and China.
Over the weekend, Trump announced a 25% tariff on imports from Mexico and Canada and a 10% on imports from China. The US President also threatened to impose tariffs on the European Union (EU). In response to this development, Mexico and Canada have also imposed retaliatory tariffs on the US. Meanwhile, China has also threatened to respond to these tariffs.
This has brought about a potential trade war, which is bearish for risk assets like Bitcoin, Ethereum, and other cryptocurrencies. Trade wars could negatively impact the economies of the countries in question and have raised concerns about stagflation and recessions. Bearing this in mind, traders have moved to offload their coins in fear of the unknown.
Renowned author and finance expert Robert Kiyosaki had warned about an impending crash for Bitcoin, Ethereum, and the broader crypto market due to these tariffs. However, he added that this was an opportunity to buy these assets on sale rather than panic. According to him, the real problem is debt, which will only get worse. As such, he expects these crypto assets to become more valuable over time.
Bitcoin, Ethereum, and the broader crypto market still risk suffering more sell pressure depending on how the stock market reacts to these tariffs. Moreover, institutional investors are invested in Bitcoin and Ethereum through ETFs, which could spark another wave of sell-offs as they offload their shares in these funds.
Donald Trump Comes Under Fire
Members of the crypto community have criticized Donald Trump, seeing as the ‘pro-crypto’ US president has indirectly contributed to the downtrend that Bitcoin, Ethereum, and the broader crypto market have faced. Even before now, there has been a bearish sentiment in the crypto market, as the president seems to be stalling on creating a strategic Bitcoin reserve.
Although Trump signed an executive order that raised the possibility of the creation of a national crypto stockpile, market experts like Galaxy Digital’s Head of Research Alex Thorn have explained that this stockpile is far off from a strategic reserve. Meanwhile, Trump has also been criticized for the creation of his TRUMP meme coin, which is believed to have drained liquidity from Bitcoin, Ethereum, and the broader crypto market.
Featured image from Unsplash, chart from Tradingview.com
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