The cryptocurrency market has faced significant losses amid escalating trade wars, leading to an 18% decrease in capitalization over the past week.
Trade Tensions and Market Losses
Following the imposition of trade tariffs by US President Donald Trump, the crypto market is undergoing significant losses. $600 billion has exited over the past week amid threats of 25% tariffs on goods from Mexico and Canada, as well as additional levies on China and the EU.
Impact on Bitcoin and Other Cryptocurrencies
Bitcoin plummeted below $80,000, losing 6% in a day and 19% over the week. It was initially considered a hedge against uncertainty but the scenario has changed. Ethereum also fell to $2,100, losing 9% in a day and 23% over the week.
Financial Markets' Reaction
Trade wars create volatility across various markets, including stocks and cryptocurrencies. During instability, liquidity shifts to the US dollar, perceived as a more stable currency, leading to massive outflows.
Despite the current losses, overall, since the end of the bear market in October 2023, the crypto market shows an uptrend. However, investors should remain cautious due to ongoing volatility.
