4th February 2025 – (New York) Cryptocurrency prices have taken a significant hit due to the looming threat of a trade war between the U.S. and its major trading partners. Bitcoin, however, has demonstrated a degree of resilience amidst this turmoil. The price of the world’s most popular cryptocurrency began to decline from approximately $105,000 shortly after President Donald Trump announced plans to impose substantial tariffs on goods from Canada, Mexico, and China.
By Sunday night, Bitcoin had fallen to around $92,000 but rebounded to over $100,000 by Monday afternoon following Trump’s announcement of a pause on tariffs for Mexican goods, which was soon followed by a similar halt on Canadian tariffs. In contrast, other cryptocurrencies like Ethereum and Dogecoin have experienced considerable price drops since Trump’s weekend tariff declaration. Notably, Trump’s own meme coin was trading at about $19 on Monday, roughly 75% below its all-time high achieved shortly after its launch around the time of his second inauguration.
“Those are riskier cryptos compared to Bitcoin,” commented Garrick Hileman, an independent cryptocurrency analyst. “However, the magnitude of the gap is somewhat surprising.”
The recent sell-off and partial recovery were part of a broader global financial market fluctuation as Trump’s tariffs were set to take effect. He cautioned Americans that they might experience “some pain” from the tariffs but asserted that it would be “worth the price” to enhance American prosperity. Additionally, Trump indicated that import taxes would “definitely happen” with the European Union and possibly the United Kingdom.
U.S. stock markets managed to recover some early losses on Monday after Mexico’s president announced a one-month reprieve for tariffs on goods from her country. Bitcoin, created in 2009 as a form of electronic cash independent of banks or governments, has transitioned from a niche asset to a mainstream investment, with its price movements increasingly mirroring those of technology stocks.
“The flip side of this asset gaining respectability and finding a role in institutional portfolios is that it is now exposed to the liquidity constraints larger investors encounter,” explained Nic Carter, a partner at the crypto investment firm Castle Island Ventures. “We aimed for Bitcoin to evolve into a global macro asset class. Now it has.”
Meme coins, often initiated as jokes without intrinsic value, have seen substantial price fluctuations recently. First Lady Melania Trump’s new meme coin, launched shortly before Trump took office, has plummeted nearly 90% from its peak value.
Once a crypto sceptic, Trump has since embraced digital assets, recognising them as a source of personal wealth and a pivotal aspect of government policy. He has pledged to position the U.S. as the world’s capital of cryptocurrency and appointed several crypto-friendly officials to significant government roles. Despite recent setbacks, cryptocurrencies have generally experienced a surge in value since Trump’s election, with Bitcoin still trading near its all-time high of $109,000.
