Cryptocurrency prices took a hit from the prospect of a trade war between the U.S. and its major trading partners, with some well-known digital assets and President Donald Trump’s own memecoin taking big hits.
The price of bitcoin started falling from about $105,000 shortly after Trump announced plans Saturday to start putting large tariffs on goods from Canada, Mexico and China.
The world’s most popular cryptocurrency fell to about $92,000 Sunday night before rebounding back over $100,000 Monday afternoon following Trump’s announcement of a pause on the tariffs on Mexican goods. He later announced a similar pause on tariffs against Canadian goods.
Bitcoin proved more resilient than other cryptocurrencies. Ethereum, dogecoin, and other popular cryptocurrencies have seen significant price drops since Trump’s weekend tariff announcement. Trump’s memecoin was trading at about $19 Monday, which is about 75% below the all-time high it reached right after Trump launched the coin on the eve of his second inauguration.
“Those are riskier cryptos” than bitcoin, said Garrick Hileman, an independent cryptocurrency analyst. “But it’s a little surprising how big the gap is.”
The sell-off and partial rebound were part of a worldwide swing in financial markets on the eve of Trump’s tariffs going into effect. Trump warned Americans they may feel “some pain” from the tariffs, which he said would be “worth the price” to make America great again. He also said Sunday night that import taxes will “definitely happen” with the European Union and possibly with the United Kingdom as well. U.S. stock markets pared early losses Monday after Mexico’s president said she had negotiated a one-month reprieve for Trump’s tariffs on goods from her country.
Bitcoin was created in 2009 as a kind of electronic cash uncontrolled by banks or governments. It and newer forms of cryptocurrencies have moved from the financial fringes to the mainstream in recent years, with bitcoin’s price movements largely tracking that of tech stocks.
“The flip side of like this asset gaining respectability and finding a role in institutional portfolios is now all of a sudden you’re exposed to the liquidity constraints that larger investors face,” said Nic Carter, a partner at the crypto investment firm Castle Island Ventures. “We wanted bitcoin to become this global macro asset class. Now it is.”
Meme coins are a highly volatile corner of the crypto industry that often start as a joke with no real value but can surge in price if enough people are willing to buy them.
Several of them have seen large price drops in the last few days. First Lady Melania Trump’s new meme coin, which she also launched just before Trump took office, is down nearly 90% from its all-time high.
Trump is a former crypto skeptic who has since warmly embraced digital assets, both as a source of personal wealth and as a matter of government policy. He’s promised to make the U.S. the world capital of crypto and appointed several crypto-friendly officials to key government positions.
Cryptocurrencies have enjoyed a surge in value since Trump’s election and bitcoin is still trading near its all-time high of $109,000.
