On February 2, Bitcoin’s value dipped below the $100,000 mark, while altcoins such as XRP and Cardano’s ADA suffered declines exceeding 17% and 22%, respectively. Notably, President Trump’s own World Liberty Financial portfolio reported losses surpassing 20%.
The cumulative market liquidation is estimated to be between $8 billion and $10 billion. Bybit’s co-founder and CEO, Ben Zhou, highlighted that their platform alone accounted for $2.1 billion in liquidations over a 24-hour period.
The tariffs, effective from February 1, include a 25% levy on imports from Mexico and Canada and a 10% duty on Chinese goods. These measures have led to widespread market declines, affecting major stock indices and cryptocurrencies alike. Furthermore, President Trump has announced intentions to extend tariffs to the European Union and sectors such as superconductors, oil, gas, steel, and copper as early as February 18.
Analysts are expressing concerns about the increasing correlation between cryptocurrencies and traditional financial markets. Economist and trader Alex Krüger noted that aggressive tariffs are detrimental to risk assets like Bitcoin and could negatively impact the broader economy.
Despite the downturn, some market participants view the current dip as a buying opportunity, anticipating potential rebounds in cryptocurrency values. André Dragosch, Bitwise’s European head of research, observed significant declines in market sentiment and positioning, suggesting it might be an opportune moment to increase Bitcoin exposure.
As the situation unfolds, the interplay between geopolitical decisions and cryptocurrency markets remains a focal point for investors and analysts alike.
