Prices of cryptocurrencies continue to drop further on Monday, with bitcoin reaching its three-week low and ether hitting its lowest since early September, as global trade war shaken investors confident in risky assets.
The world’s largest crypto bitcoin crashed to $94,476.18 on early Monday in Asia, with the price reaching a three-week low of almost $91,441.89. Ether, a smaller currency, also fell around 24% to early September level, with the price going as low as $2,494.33.
On Saturday, United States President Donald Trump imposed 25% tariffs on goods from Canada and Mexico, and a 10% levy on Chinese imports, setting for an effective date on Tuesday.
Canada and Mexico, the U.S. major trade partner, immediately threaten retaliatory measures, and China declares that it would challenge Trump’s decision at the World Trade Organization.
Recently cryptocurrencies have become more sensitive to markets’ broader sentiment, with investors concerned that tariffs could hinder growth and revenue, while also inducing inflation.
Chris Weston, head of research at Pepperstone, remarked that crypto is usually the only way to express risk during weekends, thus it has become a risk proxy for news.
Meanwhile, crypto is starting to face some headwind after a strong boost since Trump’s election, as investors felt disappointed toward the lack of immediate support for crypto, or easing regulations after he took office.
Bitcoin rallied to a record high of $107,071.86 on 20 January during Trump’s inauguration as the 47th President of the U.S., a 40% gain since the November election in anticipation of pro-crypto regulations from the new administration.
