Bitcoin experienced a significant decline after U.S. President Donald Trump decided to impose import tariffs on Canada, Mexico, and China. This drop occurred on Sunday, February 2, 2025, with Bitcoin's price last observed down by 8% at $93,100, according to data from Coin Metrics. At the same time, the CoinDesk 20 index, which measures the top 20 digital assets by market capitalization, fell by 19%, while Ether dropped 20% to its lowest level since November.
Trump's Tariff Policies Impact on the Crypto Market
The decline in Bitcoin's price began on Saturday night after Trump signed an order imposing a 25% tariff on imports from Canada and Mexico, and a 10% tariff on China, which will take effect on Tuesday. The U.S. conducts around $1.6 trillion in trade with these three countries, making this decision have a significant impact on the market.
Jeff Park, head of alpha strategies at Bitwise Asset Management, revealed that an ongoing tariff war could be beneficial for Bitcoin in the long run, as it would eventually weaken the U.S. dollar and lower interest rates. While many believe that Bitcoin is a hedge against inflation and long-term uncertainty, in the short term, Bitcoin still trades like a risk asset and is likely to respond negatively to any uncertainty arising from the tariff war triggered by Trump's tariff policies.
Potential for Further Decline in Bitcoin's Price
Investors are currently watching the key support level at $90,000 for Bitcoin, with some warning of a further pullback toward $80,000 if the cryptocurrency breaks below this support level.
Bitcoin is now about 16% lower than its all-time high of $109,350.72 on January 20, 2025. Experienced crypto investors and traders have become accustomed to price corrections of around 30% during bull markets, but with the new tariff policies in place, the impact on the crypto market could be even more significant.
With the ongoing price decline, Bitcoin risks falling further, especially if trade tensions between the U.S. and its partner countries continue. Meanwhile, Dogecoin and XRP have also recorded declines of over 24% in the same period.
Sources:
Bitcoin slides toward $90,000 after Trump orders tariffs. Accessed 2025. CNBC.
Bitcoin Trades Near $94K as Asia Traders Ponder Over Trump's Trade War. Accessed 2025. CoinDesk.
Bitcoin dips below $92,000 amid Trump's tariffs; Dogecoin, XRP down over 24%. Accessed 2025. The Economic Times.
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