Bitcoin surged to a high of nearly $95,000 following President Donald Trump’s announcement of a crypto strategic reserve during the weekend.
However, the gains quickly evaporated as escalating trade tensions between the US and key partners, including China, Canada, and Mexico, triggered a sharp market downturn.
As a result, traders speculating on the crypto market saw losses amounting to $975.65 million during the past day, according to Coinglass data.
US trade war
On March 3, Trump raised tariffs on Chinese imports from 10% to 20%, confirming a 25% duty on goods from Mexico and Canada. The decision rattled investors, fueling a sell-off in stocks and cryptocurrencies.
China reportedly responded with higher tariffs on US agricultural goods, raising duties by 10% to 15% while restricting investments from 25 American firms.
Canada also followed suit, imposing immediate tariffs on $30 billion worth of US products. By March 25, the country planned to expand tariffs by an additional $125 billion, deepening market uncertainty.
Crypto market nosedives
The crypto market reacted sharply to the news, with Bitcoin plunging 10% to $83,577, according to CryptoSlate data.
The altcoins tied to Trump’s crypto reserve initiative—including Ethereum, Cardano’s ADA, XRP, and Solana’s SOL—saw double-digit losses, with some dropping as much as 17%.
Vincent Liu, the CIO of crypto investment firm Kronos Research, told CryptoSlate that the tariff escalations had shaken investor confidence and sparked a steep crypto sell-off.
According to Liu, Bitcoin’s retreat to $83,000 and deeper losses in altcoins underlined the market’s growing sensitivity to macroeconomic shifts.
Meanwhile, analysts at The Kobeissi Letter noted that the market wiped out $500 billion in value over the past 24 hours, leaving the total crypto market cap $100 billion lower than before the crypto reserve announcement on March 2.
The firm attributed the decline to the global shift toward risk-off assets as trade war concerns fueled broader economic uncertainty. It added:
“The reality is that crypto is now viewed as a risky asset. Take a look at the sharp divergence between Gold and Bitcoin in their YTD performance. While gold prices are up +10%, Bitcoin is down -10% since January 1st. Crypto is no longer viewed as a safe haven play.”
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