President Trump’s tariffs on imports from Canada, Mexico, and China have sparked fears of a global trade war, shaking financial markets and causing Bitcoin and other cryptocurrencies to tumble. Bitcoin hit a local bottom of $92,585 on January 3, according to data from TipRanks. Ryan Lee, chief analyst at Bitget Research, explained that investor concerns over trade tensions prompted a shift from riskier assets like cryptocurrencies.
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Altcoins Suffer Steep Declines amid Liquidation Frenzy
Major altcoins such as Dogecoin (DOGE-USD), XRP (XRP-USD), and Cardano (ADA-USD) plunged over 25%, wiping out gains made since December. Data from CoinDesk shows that the overall crypto market cap dropped by 12%, marking the largest decline in over a year. Futures markets were hit hard, with over $2.2 billion in liquidations in just 24 hours. Augustine Fan of SignalPlus noted, “Markets are in full risk-off mode.”
Bitcoin Faces Possible Drop to $75K
Bitcoin’s price may fall to $75,000 by March, with on-chain data from Derive.xyz showing a 22% probability of this drop. Analysts fear that rising inflation from the tariff dispute could limit central banks’ ability to ease monetary policy. Despite this, Bitwise remains optimistic, predicting potential price recovery if crypto ETFs gain regulatory approval.
Tariffs Heighten Inflation and Market Volatility
The 25% tariffs have rattled industries from agriculture to automotive, as Canada and Mexico threaten retaliation. Andre Dragosch of Bitwise pointed out that “tariffs are sending shock waves via USD strength and contraction in global money supply.” Analysts believe that if economic pressures persist, the U.S. Federal Reserve may be forced to reignite quantitative easing (QE) to stabilize markets.
Hope for Long-Term Crypto Recovery
Despite the current turmoil, some experts maintain a positive outlook for Bitcoin and digital assets. Arthur Hayes, former CEO of BitMEX, expects Bitcoin to rebound after an initial fall to $75,000, paving the way for a future bull run. According to Derive.xyz, active filings for crypto spot ETFs by firms like Grayscale and Bitwise could signal further legitimacy and attract institutional capital.
At the time of writing, Bitcoin is sitting at $95,314.49.
