Cryptocurrency prices slid on Monday, with bitcoin at a three-week low and ether at its lowest since early September, as the spectre of a global trade war put investors on edge and pushed them out of risky assets.
Bitcoin, the world’s biggest and best-known crypto, fell to $94,476.18 on Monday morning in Asia, touching a three-week low of around $91,441.89. Smaller cryptocurrency ether was down around 24 per cent and back to levels last seen in early September. It last fetched $2,494.33.
Over the weekend, US President Donald Trump imposed 25 per cent tariffs on Mexican and most Canadian imports, and 10 per cent on goods from China, starting on Tuesday.
Canada and Mexico, the top two US trading partners, immediately vowed retaliatory measures, and China said it would challenge Trump’s levies at the World Trade Organisation.
Cryptocurrencies trade around the clock, including on weekends, and have lately been sensitive to markets’ broader sentiment. Investors worry that tariffs can hurt growth and company earnings as well as be inflationary.
“Crypto is really the only way to express risk over the weekend, and on news like this crypto resorts to a risk proxy,” said Chris Weston, head of research at Pepperstone.
At the same time, there is added downward pressure on crypto after a strong rally in the wake of Trump’s election, as some investors have felt disappointed at the lack of immediate moves to boost crypto or loosen regulations since he took office.
Bitcoin touched a record high of $107,071.86 on January 20, when Trump was sworn in as the 47th US President and is up 40 per cent since the election in early November in the hopes of crypto-friendly regulations from the Trump administration.
Trump – who once labelled crypto a scam – embraced digital assets during his campaign, promising to make the US the “crypto capital of the planet.”
Last month, Trump ordered the creation of a cryptocurrency working group tasked with proposing new digital asset regulations and exploring the creation of a national cryptocurrency stockpile.
