Cryptocurrency Market Overview

On Sunday and Monday, the cryptocurrency market experienced a substantial upsurge as Bitcoin (BTC) rallied above $90,000, pushing the total digital assets market capitalization back above $3.1 trillion.

Catalyst for the Upsurge

This upswing was primarily triggered by President Donald Trump’s latest strategic crypto reserve announcement. However, it proved transient and was interrupted by Trump’s subsequent announcement regarding tariffs.

Tariff Announcements and Market Reaction

Specifically, Trump announced that a 25% tariff on Mexico and Canada would be implemented and an additional 10% tariff would be added to tariffs already imposed on China. This announcement led to immediate retaliation from the affected countries, with Mexico stating that a delayed response does not imply a lack of response.

Crypto Market Plunge

Following these developments, both the cryptocurrency and stock markets reacted sharply. Digital assets tumbled by over $80 billion in market capitalization within just 24 hours and crashed $400 billion from their Monday highs, according to data from TradingView.

Individual Coin Performance

Bitcoin saw a significant drop, losing $9,205 in value within a single day, trading now at $81,713. Meanwhile, Ethereum (ETH) decreased by 11.19% to $2,045, and XRP fell 11.67% to $2.33.

Despite cryptocurrencies theoretically being detached from such factors as tariffs, this current bull market has shown they are sensitive to external factors, especially with the uncertain progression into 2025.

Bitcoin’s Reputation in Question

Bitcoin’s position as digital gold has come into question after experiencing price drops linked to international tensions, including Iran’s missile strike on Israel, and the ongoing impacts of AI and tariff-related developments.

Broader Market Impact

The latest downturn extended beyond cryptocurrencies. Major U.S. stock indices, including the S&P 500 and the Dow Jones Industrial Average (DJIA), saw significant declines, falling 1.9% and 1.7%, respectively, during the Tuesday trading session.

Gold, traditionally viewed as a safe-haven asset, also faced challenges. Despite a slight increase of 0.34% in four hours, it remained $21 below its earlier high, trading at $2,906 at press time.

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