The cryptocurrency market is rumbling in a new way. In the midst of escalating tensions between countries, the market for digital assets was hit hard by the enactment of former president Donald Trump’s most recent round of tariffs against Chinese products. Within the last 24 hours, more than $411 million worth of crypto assets were wiped out, triggering the fear of a bigger market shakeout.
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Bitcoin and Ethereum Lead the Slide
Bitcoin is down 4.1 percent to reach $76,550, and Ethereum is experiencing a more dramatic decline of 8.3 percent. This is its low trading levels since March 2023. Ethereum in particular was hit with a hammer, leading losses in the top ten cryptocurrencies according to market capitalization. It comes just hours after Bitcoin dropped to $75,000 for a brief period on Tuesday. This was less than three hours after the new tariffs came into the market.
The overall market isn’t doing significantly better. Bitcoin is down nearly 30% from its peak of $110,000 in January. This was just prior to the inauguration of President Trump.
Altcoins Feel the Heat
The major altcoins are also bleeding. According to CoinGecko below, you can see how a handful major altcoins have been performing:
- Dogecoin The Dogecoin has fallen 16.3 percent in the last 24 hours
- Solana The Solana area is down 18% in the last week
- Cardano is down 23.7 percentage in the last seven days
The losses provide a dire outlook for the market, as investors reacting ad hoc to growing uncertainties on the world scene.
“A Miserable Run” for Crypto Investors
Pav Hundal, the lead market analyst for Swyftx described the state of the market:
“It’s been a miserable run for investors since the start of February, with more than $1.2 trillion in value wiped from the crypto market.”
According to CoinGlass Over $411 million of liquidation transactions occurred in the last 24 hours, which is a clear sign of the heightened markets’ distress.
“This has been a very emotional journey,” Hundal stated. “Everyone’s operating at extremes, and there’s no in-between.”
Trade War Fallout Hits Traditional Markets Too
The crash in crypto isn’t taking place as a stand-alone event. Traditional financial markets too are suffering. Trump’s new tariffs are causing tensions and led to many calling a massive trade war between the U.S. and China.
Asian market shares started the week in a negative direction on Wednesday
- Japan’s Nikkei 225 is down 2.6 per cent at the midday
- Australia’s ASX 200: Down 2%
In the U.S., the S&P 500 fell 1.5 percent on Tuesday. This brought the losses it has suffered since February’s middle to close to 20%nearing the threshold of bear markets.
“We’ve entered a new era of protectionism,” stated Hundal. “What’s worrying is we still have no clarity on where it’s all going to settle.”
Bond Market Signals Flash Red
The volatility has sunk into the markets for bonds. The 10-year Treasury yield jumped between 4.2 percent to 4.4 percent — which is one of the quickest movements in the intraday market since World War II. A worrying sign is that it appears that the U.S. Treasury’s auction of three-year bonds after “Liberation Day” saw its lowest level of demand since 2023.
The situation has raised concerns about the declining interest of foreign investors towards U.S. debt, especially as trade tensions erupt to what is being described as an “once-in-a-lifetime” economic fracture.
Final Thoughts
Now the question is what is the limit?
Over 1 trillion dollars already removed from crypto’s valuations and markets around the world slipping the edge, investors are hoping for a cut-off that will provide some relief or a sign that all the pain is gone. As long as trade wars remain in place and trade in the global market remains uncertain the crypto market will continue to be impacted by the fallout.
Keep an eye on the news, be informed And most important of all be vigilant.
