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Cryptocurrency prices have tumbled after Donald Trump imposed sweeping tariffs on the US’s largest trading partners, undermining investors’ early expectations the US president would deliver a boost to the industry.
Bitcoin sank 7 per cent to $94,000 on Monday, its lowest level in three weeks, leading a rout of the sector. Ethereum, the second-largest and widely used in decentralised finance trading, fell more than a fifth to $2,565 per token.
The declines took the losses over the weekend to a nominal value of $430bn, according to CCData, amounting to a 13 per cent decline of the entire market.
Traders shied away from risky assets after Trump slapped steep import duties on goods imports from Mexico, Canada and China. The sharp falls unravelled many cryptocurrency price gains since Trump’s inauguration two weeks ago, when investors had hoped he would boost their fortunes.
“There’s good Trump and bad Trump,” said Geoff Kendrick, global head of digital assets research at Standard Chartered. “The good version of Trump is [him saying] the industry is going to move forward . . . regulatory changes. Bad Trump is things like tariffs and more volatile markets, which is . . . less helpful,” Kendrick said.
Trump exuberantly courted the digital asset industry during his election campaign, winning financial and vocal backing from the sector.
In return he has signed an executive order supporting the growth and use of digital assets and blockchain technology and vowed to create a national stockpile of bitcoin, moves that investors celebrated. But his tariffs jolted the market and sent shares in crypto companies lower.
Shares in crypto exchange Coinbase lost 5.6 per cent and bitcoin-hoarding software group MicroStrategy shed 5.4 per cent in early trading in New York.
“Trump said no one has to pay taxes on gains in crypto and then got rid of all the gains,” said Tyler Hogge, partner at Pelion Venture Partners.
Among other coins, Ripple’s XRP and Cardano’s ADA tokens fell 26 and 15 per cent respectively on Monday. Memecoins such as Dogecoin, backed by Elon Musk, dropped 12 per cent. Trump’s own memecoin plunged 23 per cent, to take its total losses since a peak two weeks ago to more than 75 per cent. The memecoin for Melania Trump lost 15.3 per cent.
“A tidal wave of fear, uncertainty and doubt has been unleashed across the cryptocurrency market,” said Petr Kozyakov, chief executive of crypto payments company Mercuryo.
He added that the collapse in value of the Trumps’ memecoins “underlines the highly speculative nature of meme tokens and the high risks that they pose to the uninformed”.
Since becoming president, Trump has increased his personal interest in crypto. The president and his wife launched their own memecoins in January, to backlash from crypto executives who warned that the speculative tokens would damage the industry’s reputation.
Last week, the Trump Media and Technology Group, in which Trump is a majority shareholder, said it would invest up to $250bn into crypto and other assets.
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