Bitcoin drops below $100,000 as Trump’s trade war rattles markets — analysts split on what’s next

Bitcoin tumbled below the $100,000 mark early Sunday as markets reacted to President Donald Trump’s sweeping new tariffs on America’s three largest trading partners.

The cryptocurrency market shed $200 billion in value, with every asset in the top 100 sinking into the red over the past 24 hours.

The sell-off came after Trump announced a 25% tariff on imports from Mexico and Canada alongside an additional 10% tariff on Chinese goods.

The administration justified the move under the International Emergency Economic Powers Act, citing an “extraordinary threat” posed by illegal immigration and the fentanyl crisis.

Bitcoin, often considered a hedge against economic uncertainty, initially held steady but later plunged as risk-off sentiment spread.

The sudden downturn led to $540 million in liquidations, mostly from overleveraged long positions.

Bloomberg Economics estimates that the tariffs will push the US average tariff rate to its highest level since the 1940s.

Canada and Mexico have already pledged retaliatory tariffs, with Canadian Prime Minister Justin Trudeau confirming levies on $155 billion worth of US goods.

Some analysts see trade war tensions as a bullish narrative for Bitcoin and other cryptocurrencies.

Rising tariffs are stoking inflation concerns, and there is an increasing demand for alternative stores of value. Some investors believe Bitcoin could benefit as a hedge against economic instability and currency devaluation.

“You simply have not yet grasped how amazing a sustained tariff war is going to be for Bitcoin in the long run,” tweeted Jeff Park, head of alpha strategies at Bitwise.

Others fear liquidity shocks and market-wide risk aversion could continue weighing on price action in the short term.

“In the short term, Bitcoin still trades as a risk-on asset,” said Nic Puckrin, CEO of Coin Bureau. “If markets keep collapsing, it could bring BTC down with it and end the current cycle.”

Crypto market movers

• Bitcoin has lost 2% in the past 24 hours and is trading at $99,950.
• Ethereum is down 4.5% over the same period to $3,115.

What we’re reading

• MicroStrategy-inspired Ethereum fund refunds depositors after debut flop ― DL News
• Grayscale Unveils New Dogecoin Trust ― CoinDesk
• Why the new FDIC Leadership Isn’t Convinced Operation Chokepoint 2.0 Exists ― Unchained
• How to check the market’s pulse ― Milk Road
• Kraken shelves Tether USDT, other stablecoins in Europe as MiCA rules take hold ― DL News

Kyle Baird is DL News’ Weekend Editor. Got a tip? Email at kbaird@dlnews.com.