Bitcoin saw a notable decline on Tuesday, retreating further from recent highs as investor sentiment was shaken by President-elect Donald Trump’s threat to impose additional trade tariffs on China and other key trading partners. The world’s largest cryptocurrency also faced selling pressure, likely driven by profit-taking after its failure to breach the coveted $100,000 mark last week.
At 00:49 ET (05:49 GMT), Bitcoin was down 3.6%, trading at $94,567.1. The cryptocurrency had reached a record high of over $99,000 last week but has since experienced a sharp pullback.
The rally in Bitcoin was largely fueled by optimism surrounding potential regulatory improvements under Trump’s administration. However, his recent comments on trade tariffs have dampened risk appetite. Trump announced plans to impose a 10% import tariff on China and a 25% tariff on Canada and Mexico as part of efforts to curb illegal immigration and drug trafficking into the U.S. These statements raised concerns of a renewed trade conflict among the world’s largest economies, potentially slowing economic growth and harming risk-sensitive assets like Bitcoin.
Following Trump’s tariff threats, broader financial markets also retreated, while the U.S. dollar strengthened, approaching a two-year high it had reached the previous week. Trump’s tariff plans could weigh heavily on global growth and have adverse effects on risk-driven assets in the future.
Crypto markets, in particular, are now closely monitoring how Trump’s policies will impact the sector. Throughout his campaign, Trump had supported pro-crypto stances, promising to position the U.S. as the global leader in cryptocurrency innovation. His cabinet picks for Treasury Secretary and Commerce Secretary have also expressed pro-crypto views, but the market is waiting for concrete policy actions when Trump officially takes office in January.
The recent weakness in Bitcoin has also affected other cryptocurrency and crypto-related assets. MicroStrategy, the world’s largest corporate holder of Bitcoin, saw its stock tumble in the past few days, after a recent filing revealed the company had spent over $5 billion on Bitcoin last week.
Meanwhile, the broader cryptocurrency market followed Bitcoin’s decline on Tuesday, with most major altcoins tracking lower. Ethereum, however, saw a slight gain, rising to $3,242.17. XRP dropped 1.4% following strong gains last week, particularly after news that U.S. Securities and Exchange Commission Chairman Gary Gensler will step down in January. Solana, Cardano, and Polygon saw losses between 1.9% and 6.3%, while meme token Dogecoin fell 4.2%.
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