Cryptocurrency Prices Decline Amidst Intensifying Trade War Fears
Cryptocurrency markets are experiencing a downturn as concerns over a potential global trade war heighten investor unease, leading to a shift away from riskier assets. Bitcoin prices have dropped by over 4% on Monday morning in Asia, reaching a three-week low of approximately $96,606. Ethereum, a smaller cryptocurrency, has witnessed a significant decline of around 12%, returning to levels observed in early November.
Over the weekend, President Donald Trump imposed tariffs of 25% on Mexican and Canadian imports and 10% on Chinese goods, effective Tuesday. Cryptocurrency trading operates 24/7, including weekends, and has recently been highly responsive to broader market sentiment. Investors anticipate that tariffs could adversely impact economic growth and corporate earnings.
"Cryptocurrency has emerged as the primary avenue for expressing risk over the weekend, and in situations like this, it serves as a risk proxy," remarked Chris Weston, Head of Research at Pepperstone.
Moreover, there has been additional downward pressure on cryptocurrency prices following a surge in the wake of Trump's election victory. Some investors have expressed disappointment with the lack of immediate steps to advance cryptocurrency or ease regulations since his inauguration.