An unexpected downturn has triggered the cryptocurrency market, draining a staggering $300 billion in value following a brief period of optimism ignited by Donald Trump's announcement of the US Crypto Strategic Reserves. However, the market's euphoria was short-lived, as Trump's subsequent sweeping tariffs on China, Mexico, and Canada triggered a wave of panic, sending Bitcoin (BTC) and major altcoins, including Ethereum (ETH), Solana (SOL), and XRP, into a steep decline.
As of 12:41 PM, Bitcoin was trading at $84,119.28, with a market capitalization of $1.67 trillion and a 24-hour trading volume of $76.75 billion. This represents a 9.47% plunge over the past 24 hours, falling from a peak of $93,600 to a low of $83,300.
The broader altcoin market mirrored Bitcoin's decline:
According to CoinMarketCap, the total cryptocurrency market capitalization has dropped by 10%, now standing at $2.77 trillion, effectively wiping out all of Monday's gains.
The crypto crash was not an isolated event; it coincided with a sharp downturn in US equities, reflecting widespread market panic over Trump's aggressive trade policies and their potential economic fallout. The stock market, already under pressure from potential inflation and interest rate uncertainties, triggered a sharp reaction to the latest tariff announcements
The sell-off was triggered by Trump's new 25% tariffs on imports from Mexico and Canada, alongside a doubling of duties on Chinese goods to 20%. This aggressive stance on trade has raised concerns over increasing costs for businesses and consumers, potentially slowing economic growth.
In response, China announced retaliatory tariffs of 10%-15% on select US imports, set to take effect on March 10. The move has escalated tensions between the world's two largest economies, rekindling fears of a global trade war reminiscent of the 2018-2019 tariff battles that unsettled global markets.
The rapid reversal of the crypto market's fortunes has led some analysts to question the timing and intent of Trump's US Crypto Strategic Reserves announcement. Economist Peter Schiff has accused Trump of orchestrating "the biggest crypto pump-and-dump scheme of all time," demanding a Congressional investigation into potential insider trading and market manipulation.
Bitcoin, which briefly surged past $94,000 following Trump's Sunday announcement, has now fallen below its pre-announcement levels, lending credence to these allegations.
Analysts are questioning whether the recent cryptocurrency announcements by the self-proclaimed "crypto-friendly" President, particularly the US Crypto Strategic Reserves, were intended to manipulate the market. Some are skeptical and allege an artificial increase in market value allowed insiders to profit before a decline.
Global trade tensions caused by tariffs have increased market instability. The approval of the US Crypto Strategic Reserves faces potential regulatory challenges. Investors should anticipate further price volatility as the market enters a period of uncertainty. A ten percent decrease in market value has erased recent gains, adding to economic apprehension.
While market recovery is possible with clear regulation, the immediate future is uncertain.
The cryptocurrency market's $300 billion crash reveals its vulnerability to political and economic events. While Trump's support for crypto initially created optimism, his tariff policies introduced significant risks. As global trade tensions rise, investors are frazzled state. They are closely monitoring regulatory and geopolitical developments, as these will play significant factors in the future of cryptocurrency markets