- The crypto market has taken a sharp downturn following Donald Trump’s confirmation of tariffs on the EU, as investors braced for potential economic fallout.
- Bitcoin hit its lowest price of the year today, dropping to $84,000 and pulling the crypto market down with it, as Ethereum and XRP fell 5.54% and 3.17% in the last 24 hours.
Bitcoin, the world’s first cryptocurrency, is in free fall. After reaching an all-time high of $109,000 during Donald Trump’s inauguration, the asset has suffered a sharp downturn. The latest blow? Donald Trump announced a 25% tariff on European Union (EU) imports, sending shockwaves through global markets, including crypto.
Yesterday, Bitcoin was already struggling at $88,000, but today, the flagship cryptocurrency has plummeted below $87,000 and is currently trading at $86,755, marking its lowest point since the start of the year. Notably, Bitcoin hasn’t seen the $ 80,000 since November 18, 2024, when it last traded at $89,000.
The Crypto Fear & Greed Index, a key indicator of market sentiment, has plunged into Extreme Fear, hitting a score of 10 on February 26. This sharp decline reflects growing investor anxiety, with many fearing another wave of liquidations and market-wide sell-offs.
This is the lowest sentiment level seen since June 2022, a period marked by some of the biggest collapses in crypto history. That year saw the downfall of Three Arrows Capital (3AC), a major crypto hedge fund that crumbled under excessive leverage and exposure to risky assets.
Around the same time, Terraform Labs faced a disaster as its ecosystem, built around Luna (LUNC) and the algorithmic stablecoin UST (now USTC), collapsed in May 2022. UST, designed to maintain a 1:1 peg to the US dollar, lost its stability, triggering a catastrophic $40 billion wipeout.
If sentiment doesn’t improve, Bitcoin could slide further, potentially testing $74,000 or even $70,000. However, Michael Saylor and Robert Kiyosaki, author of the Rich Dad Poor Dad series, view this as a buying opportunity for investors, comparing it to past market bottoms.
Trump’s Tariffs: The Catalyst for Bitcoin’s Crash
As mentioned in our previous blog post, President Donald Trump announced a 25% tariff on imports from the European Union (EU), escalating global trade tensions. As investors assess the economic fallout, the euro has already taken a hit, dropping 0.2% against the U.S. dollar to trade at $1.049.
While traditional markets brace for impact, the crypto sector has taken an even bigger hit. Adding to the uncertainty, the EU has vowed immediate retaliation, fueling fears of further instability in Bitcoin and other digital assets. Meanwhile, Trump reaffirmed that tariffs on Canada and Mexico will proceed as planned, claiming that the U.S. has been treated unfairly by its trade partners.
With the Trump administration also sending memos to federal agencies regarding mass layoffs, fears of a broader economic downturn are mounting. As global trade tensions rise, Bitcoin and other assets may serve as a hedge against market volatility, continuing their historical role as alternative assets during financial instability.
