Crypto market slides as trade tensions drive investors away

February 03, 2025 (MLN): Cryptocurrency prices slid on Monday, with bitcoin at a three-week low and ether at its lowest since early September, as the spectre of a global trade war put investors on edge and pushed them out of risky assets.

Bitcoin, the world's biggest and best-known crypto, fell to $94,476.18 on Monday morning in Asia, touching a three-week low of around $91,441.89.

Smaller cryptocurrency ether was down around 24% and back to levels last seen in early September.

It last fetched $2,494.33.

Over the weekend, U.S. President Donald Trump imposed 25% tariffs on Mexican and most Canadian imports, and 10% on goods from China, starting on Tuesday.

Canada and Mexico, the top two U.S. trading partners, immediately vowed retaliatory measures, and China said it would challenge Trump's levies at the World Trade Organization.

Cryptocurrencies trade around the clock, including on weekends, and have lately been sensitive to markets' broader sentiment, as Reuters reported.

Investors worry that tariffs can hurt growth and company earnings as well as be inflationary.

"Crypto is really the only way to express risk over the weekend, and on news like this crypto resorts to a risk proxy," said Chris Weston, head of research at Pepperstone.

At the same time, crypto faces added downward pressure after a strong rally following Trump's election.

Some investors are disappointed by the lack of immediate moves to boost crypto or loosen regulations since he took office.

Bitcoin reached a record high of $107,071.86 on Jan. 20, when Trump was sworn in as the 47th U.S. President.

It is up 40% since the election in early November, fueled by hopes of crypto-friendly regulations from the Trump administration.

Trump who once labelled crypto a scam embraced digital assets during his campaign, promising to make the United States the "crypto capital of the planet."

Last month, Trump ordered the creation of a cryptocurrency working group tasked with proposing new digital asset regulations and exploring the creation of a national cryptocurrency stockpile.

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