The cryptocurrency market took a sharp hit over the weekend as Bitcoin (BTC) plunged below $93,000, and XRP sank under the $2 mark, following escalating trade tensions between the U.S. and its key trading partners.
Trump’s Tariff Hike Triggers Market Sell-Off
The slide began after the U.S. President Donald Trump announced hefty new tariffs—25% on imports from Mexico and Canada, along with a 10% duty on Chinese goods, set to take effect Tuesday.
In response, Canada and other affected nations quickly retaliated with their own tariff measures. Canadian Prime Minister Justin Trudeau has criticized the U.S. decision, stating and will impose matching 25% tariffs on up to $155 billion worth of U.S. imports, including alcohol and fruit, intensifying the economic standoff.
Crypto Market Reacts to Economic Uncertainty
The deepening trade war has injected a fresh wave of uncertainty into financial markets, including crypto. Bitcoin, which often behaves as a hedge against long-term inflation and economic instability, is still highly sensitive to short-term macroeconomic shocks. As a result, the leading cryptocurrency tumbled alongside altcoins like XRP, Ethereum (ETH), and Solana (SOL), as traders moved to reduce exposure amid heightened volatility.
Could Tariff Wars Ultimately Benefit Crypto?
Despite the immediate market downturn, some analysts believe that the ongoing tariff war could ultimately strengthen the case for crypto. A prolonged economic conflict is expected to weaken the U.S. dollar and lead to potential shifts in monetary policy, factors that have historically been bullish for decentralized assets. If confidence in fiat currencies continues to erode, digital assets like Bitcoin could see renewed demand as investors seek alternatives.
For now, however, the crypto market remains on edge, with traders watching closely for further developments. While uncertainty looms large, many long-term believers see the current dip as a strategic buying opportunity, anticipating that Bitcoin and key altcoins could rebound once market sentiment stabilizes.