Bitcoin Price Dips 3% As Trade Tensions Resurface Under Trump

Following U.S. President Donald Trump’s announcement of plans to hike global tariffs to 15%, Bitcoin dropped as much as 5% to less than $65,000 on Monday.

The decline coincided with an early trading spike in Asian stocks, highlighting the disconnect between cryptocurrency and local stock markets in the face of fresh tariff uncertainties.

Since October of last year, when it surpassed $125,000, Bitcoin has had a steep decline that has continued into the new year. The biggest cryptocurrency in the world has dropped 26% this year and more than 47% since its peak in October.

Jeff Mei, COO of the multinational blockchain technology company BTSE, stated, “We think that investors are selling cryptocurrency assets in anticipation of a more severe market decline due to the abrupt increase in tariff rates.”

He also said that investors are worried that the U.S. military buildup near Iran increases the likelihood of an armed war that might expand regionally and affect international economic flows.

With Trump indicating last Thursday that he would make a decision within the next 10 days over the possibility of attacking Iran, the United States has significantly increased its military presence in the Middle East.

According to Markus Thielen, head of research at market intelligence platform 10x Research, the recent decline in bitcoin was more caused by low market conviction and inadequate liquidity than by a single headline.

According to Thielen, the decline is consistent with a bear market phase that is typically marked by low volumes and anxiety related to the U.S. midterm elections. He anticipates more declines toward $50,000 before a more resilient bottom occurs.

Due to safe-haven demand, spot gold rose more than 1% on Monday, indicating a significant divergence from bitcoin, which has frequently been referred to as “digital gold,” notably by Jerome Powell, the chair of the US Federal Reserve.

As of 12.18 a.m. ET, the cryptocurrency had lost 3% of its value and was trading at $65,167. At $1,867.3, Ether, the second most popular cryptocurrency, was down 3.9%.

Bitwise Chief Investment Officer Matt Hougan said earlier this month that the “four-year cycle” of the cryptocurrency market was the main cause of bitcoin’s decline, claiming that the current retracement reflects trends observed in previous declines. Bitwise is significantly involved in crypto ETFs and manages assets worth over $15 billion.

Hougan emphasized that there was no one cause of the losses, citing a combination of broader “quantum risk,” investors shifting into gold and AI stocks, and persistent worries over Fed nominee Kevin Warsh. On February 5, Bitcoin fell below $63,119.8, a level not seen in over a year.

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FAQs: Bitcoin Drops After Trump Tariff Announcement

1. Why did Bitcoin fall recently?

Bitcoin dropped after U.S. President Donald Trump announced plans to raise global tariffs to 15%, creating fresh uncertainty in global markets.

2. How much did Bitcoin decline?

Bitcoin fell as much as 5% at one point, slipping below $65,000. It was later trading around $65,167, down about 3%.

3. How has Bitcoin performed this year?

Bitcoin is down approximately 26% year-to-date and has declined over 47% since its peak above $125,000 in October last year.

4. Why are tariffs affecting cryptocurrency markets?

Higher tariffs can trigger fears of slower global growth and financial instability. Investors often reduce exposure to riskier assets like cryptocurrencies during uncertain economic conditions.

5. Is geopolitical tension also impacting Bitcoin?

Yes. Concerns about a potential U.S. military conflict involving Iran have added to market anxiety, further pressuring crypto prices.

6. What are experts saying about the decline?

Jeff Mei, COO of BTSE, said investors are selling crypto assets in anticipation of broader market weakness. Markus Thielen of 10x Research noted that low liquidity and weak market conviction are also contributing factors.