Crypto News: Trump’s Tariff News Sends Bitcoin and Altcoins Into Freefall

• Bitcoin and the crypto market dropped sharply after the U.S. imposed new tariffs, with Bitcoin falling over 5% before a slight recovery.

• Altcoins saw major losses, and experts warn that trade tensions and volatility could lead to more financial instability.

On February 1, the United States government applied new tariffs for Canadian, Mexican, and Chinese imports. Canadian and Mexican imports underwent a 25% tariff increase, yet Chinese imports received a 10% tariff imposition. Financial markets and cryptocurrency values reacted strongly to this decision, increasing global trade tensions.

Price turbulence impacted Bitcoin after the government announcement, leading to decreasing values reaching around $91,200 before recovery stabilized the virtual currency at $94,000 on February 3. The cryptocurrency’s current price is 87% below its peak value of $109,000. Increased trading volumes exceeding 200% reflect both intensified market activities and intensified selling pressures across the market.

Altcoins Face Sharp Declines Amid Market Turbulence

Further losses strike every cryptocurrency market sector throughout this period. Global crypto market capitalization decreased by an estimated 12% throughout the last 24 hours, reaching $3.15 trillion on February 3. The depreciation has specifically impacted the leading alternative coins sector. Ethereum experienced a drop of about 20%, while Ripple (XRP) saw a 22% decrease, Solana (SOL) lost 8% of its value, and Binance Coin (BNB) lost more than 15% of its market presence.

Market panic occurs when trading volume increases while prices decrease because asset sellers rapidly enter the market. Based on the observed market trend, long-term investors liquidate their holdings at reduced gains or losses. The Bitcoin Long Term Holder SOPR data shows Bitcoin holders from previous market periods are selling their assets, which typically signals a period of bearish market decline.

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Crypto Market Uncertainty Grows After U.S. Trade Tariffs

After President Donald Trump assumed office on January 20, the market experienced an optimistic period that led to the recent deep price reduction. Bitcoin and various cryptocurrency market values experienced substantial growth during this period. The market lost its positive sentiment following new policy developments, which introduced trade tariffs.

Experts in the financial sector warn about additional economic problems that may develop in the future. Market experts, led by BitMEX CEO Arthur Hayes, predict an impending financial crisis will unfold due to intensifying trade challenges and rising stock market turbulence.

60% of American plebes don’t have $1k of emergency funds. The Fed is “worried” about inflation. So Trump decides to hike energy prices via tariffs? He ain’t a fool, maybe he is trying to trigger a mini financial crisis? It’s def in the maybe column. pic.twitter.com/VEiI9qZZqC

— Arthur Hayes (@CryptoHayes) February 2, 2025

Market participants follow the developing trends between geopolitical events and cryptocurrency price movements as the current scenario develops. The current market situation presents purchase potential to certain investors, yet numerous others choose to stay protective because of existing market ambiguity.

The next few weeks will establish if cryptocurrencies can find stability or if their downward trend will dominate. Market participants will scrutinize changes in policy alongside investor emotions and trade metrics to predict future market movements.