- The cryptocurrency market has seen a decline of $250 billion in market capitalization since the announcement of tariffs by Trump.
- President Donald Trump has threatened to impose an additional 50% tariff on China as the global trade conflict intensifies.
- The cryptocurrency market might experience a rapid rebound if international trading partners can negotiate a trade deal with the US.
The cryptocurrency sector continued its downward trend on Monday, accumulating a $250 billion loss in market capitalization since the US enforced tariffs on foreign trading partners. The market appears vulnerable to further declines as President Trump warned of an upcoming 50% tariff on China.
Bitcoin and the cryptocurrency market further decline as trade tensions escalate
Bitcoin (BTC) temporarily fell below $80,000, reaching a low of $74,000, with many leading altcoins hitting multi-year lows based on data from CoinGecko. Ethereum (ETH) dropped below $1,500, a level not seen since March 2023. Solana (SOL) briefly dipped under $100 for the first time since January 2024.
The latest decline has increased the total cryptocurrency market cap loss to over $250 billion since the tariffs commenced last Wednesday. The market is now more than 30% lower than its peak of $3.9 trillion reached in December.
Liquidations surged across major cryptocurrencies in the derivatives market, with Bitcoin and Ethereum experiencing a combined liquidation of $640 million within the last 24 hours, as reported by Coinglass data.
“Though US equities were already facing significant pressure last week, BTC largely withstood the storm over the weekend. However, that resilience was short-lived,” analysts at QCP remarked in their Monday update.
This shift underscores the crypto market’s renewed alignment with stock movements.
The persistent downturn in both the cryptocurrency and stock markets results from President Trump’s declaration of an additional 50% tariff on China, adding to previously imposed tariffs totaling 104%. Trump mentioned that this new tariff would take effect unless China eliminates its 34% levy on US goods by April 8.
In response, China vowed to resist “to the end” regarding the tariffs, indicating potential for continued market volatility, as highlighted by CNBC.
Despite the negative atmosphere provoked by the announcement, a false news report regarding Trump delaying tariffs for 30 days momentarily lifted both the crypto and stock markets. The S&P 500 surged by 400 points in mere minutes, and Bitcoin swiftly approached the $80K mark. However, White House officials quickly denied the report, leading to another market decline, albeit not returning to the day’s lowest figures.
“Today, investors demonstrated their eagerness to rotate back into the market,” stated analysts from The Kobeissi Letters in a post on X on Monday.
In a sense, investors have been conditioned over the past two years to buy the dip in stocks. This applies to both institutional and retail investors. Even in March, capital flowed into stocks as the market fell. Now, no one wants to “miss” the bottom if a trade deal is on the horizon. pic.twitter.com/a2fM4xu6DG
— The Kobeissi Letter (@KobeissiLetter) April 7, 2025
Nevertheless, analysts warned that market sentiment could deteriorate further if an agreement between the US and China is not reached by April 9.