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President Donald Trump’s vow to impose sweeping new tariffs on goods from Mexico, Canada, and China has sent shockwaves through global markets, with the cryptocurrency sector bearing the brunt of the economic uncertainty.
Bitcoin plummeted below the critical $80,000 threshold, dragging Ethereum and the broader crypto market down with it, as investors braced for the potential fallout of a looming trade war and its impact on the already fragile global economy.
The sell-off in crypto mirrored a broader downturn in traditional markets, with stocks tumbling as Trump reaffirmed his plans to impose tariffs as early as March 4th. The President cited insufficient progress in curbing fentanyl flows from Mexico and Canada, and escalating trade tensions with China, as justification for the aggressive trade measures – a 25% tariff on goods from Mexico and Canada and an additional 10% tariff on Chinese imports, on top of existing levies, Reuters reported.
These moves immediately rattled investor confidence, sending a clear signal that the volatile trade policies of the Trump administration are once again poised to inject significant uncertainty into the global economic landscape.
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The crypto market reacted sharply and negatively to this news. Bitcoin, the leading cryptocurrency, fell over 5% in the past 24 hours, breaching the $80,000 mark. Ethereum experienced an even steeper decline, plummeting over 8% to $2,133. The global cryptocurrency market capitalization contracted by 5.05% in the last day alone, currently sitting at $2.68 trillion, reflecting widespread investor flight to safety amid the escalating economic anxieties.
This crypto downturn mirrored a broader “risk-off” sentiment across financial markets. The S&P 500 closed its Thursday session down 1.59%, and the Dow Jones Industrial Average lost 0.45%. Adding fuel to the fire, shares of tech giant Nvidia, a market bellwether, plunged 8.5% despite exceeding earnings estimates, highlighting the pervasive unease gripping investors.
The prospect of increased import costs, disrupted supply chains, and retaliatory tariffs is casting a long shadow over the global economic outlook, and the cryptocurrency market, known for its volatility, is proving particularly vulnerable to these macroeconomic headwinds.
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