The announcement by President Trump of new tariffs on imports from Canada and Mexico sent shockwaves through the financial world, leading to nearly $900 million in leveraged liquidations in the cryptocurrency market. The tariffs, which are set to take effect in March 2025, will impact over $900 billion worth of US imports, including vehicles, auto parts, and agricultural goods.
In a press conference with French President Emmanuel Macron, Trump emphasized that the tariffs were part of his administration’s ongoing efforts to balance the trade deficit and protect American businesses. “We’re on time with the tariffs, and it seems like that’s moving along very rapidly,” he stated. “The tariffs are going forward on time, on schedule.”
However, the President’s announcement has raised concerns about a potential economic slowdown and increased inflation, unsettling both businesses and consumers. The potential impact was immediately visible in the cryptocurrency market, which experienced significant volatility following the tariff announcement.
Bitcoin, the most popular cryptocurrency, saw its price tumble below $95,000, reaching a low of around $91,000. Ethereum, another significant player in the cryptocurrency market, also experienced a significant drop, losing 11% of its value to trade at $2,500. The total market capitalization of the broader cryptocurrency market fell by approximately 8%, representing widespread losses across the sector.
The market instability resulted in $880 million in long position liquidations over a 24-hour period. Ethereum traders bore the brunt of the losses, suffering $255 million in losses, while Bitcoin traders experienced $185 million in liquidations, according to data from Coinglass.
Most altcoins, alternative cryptocurrencies to Bitcoin, posted double-digit losses. XRP fell 10%, while SOL dropped almost 16%. DOGE declined 13%, and ADA fell 11%. BNB, another altcoin, decreased by around 6% in the last 24 hours.
In other cryptocurrency news, efforts to pass Bitcoin reserve bills in several U.S. states have faced significant obstacles. These bills, which proposed that states hold Bitcoin as part of their reserves, were defeated in Montana, North Dakota, Wyoming, and South Dakota.
The defeat of these bills represents a significant setback for proponents of cryptocurrency, who had hoped that the acceptance of Bitcoin as a reserve asset by U.S. states would help to increase the legitimacy and acceptance of the cryptocurrency. However, these recent developments suggest that there is still significant resistance to the widespread adoption of cryptocurrencies, both within the financial industry and in the political sphere.
