President Donald Trump announced new tariffs on Mexico, Canada, and China last Friday, leading to a global market crash that extended into the start of this week.
Markets Shocked by New Tariffs
Following the tariffs, US markets were hit hard: Dow Futures fell by 1.5%, Nasdaq dropped by 1.9%, and the S&P 500 slid by 1.71%. Gold and silver also saw declines in early Asian trading markets before a slight recovery by noon. Bitcoin, previously trading above $100,000, fell by over 4%.
Bitcoin and Cryptocurrencies Amid Economic Instability
In the broader market decline, only three cryptocurrencies in the top 50 saw positive trade. The global cryptocurrency market cap dropped by 7% with liquidations hitting $2 billion. Investors fear economic sanctions from major trading partners like Mexico, Canada, and China.
Consequences for the US Economy
Many economists believe the new tariffs might speed up inflation. The Federal Reserve, worried about potential negative impacts, has not yet cut interest rates. As inflation rises, the purchasing power of the dollar might weaken, making investors look for safer assets like Bitcoin.
Despite the bleak outlook, experts suggest that Bitcoin and other cryptocurrencies could emerge as safe havens amid global economic instability.
