The introduction of U.S. protective tariffs has triggered a massive sell-off in the cryptocurrency market. Ethereum has suffered its most significant price drop since the COVID-19 crash.
Amid growing fears of a trade war due to newly announced U.S. tariffs, investors are pulling out of speculative assets. Ethereum plunged by approximately 27%, dropping to $2,494—its steepest single-day decline since the March 2020 crash caused by the pandemic.
Bitcoin also experienced a sharp drop, slipping 6% to a three-week low of $91,441. “Investors are concerned that escalating trade tensions could fuel inflation, which in turn might hinder expectations for interest rate cuts,” said analyst Timo Emden of Emden Research.
Fear of a Trade War Intensifies Market Volatility
The latest market downturn is primarily linked to U.S. President Donald Trump’s announcement of steep tariffs on imports from Mexico, Canada, and China. In response, Canada and Mexico—two of the U.S.’s biggest trading partners—immediately announced countermeasures, while China stated it would challenge the tariffs at the World Trade Organization.
Ethereum wasn’t the only cryptocurrency hit by the sell-off. Bitcoin, XRP (Ripple), Solana, and Dogecoin all recorded significant losses. The crypto market is known for its high volatility, and with digital assets being traded 24/7, they often react strongly to broader market sentiment—even over the weekend.
Factors such as regulatory uncertainty, macroeconomic shifts, and investor sentiment can drive rapid and substantial price movements outside of traditional market hours. Additionally, the cryptocurrency market has been under increased downward pressure following a strong rally after Trump’s election. Some investors are now disappointed by the lack of immediate policy changes favoring digital assets or easing regulations since he took office.
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