Cryptocurrencies experienced a sharp decline as risk assets broadly weakened and demand for safe-haven assets increased. This downturn followed US President Donald Trump’s proposal of new tariffs on eight European countries, creating increased uncertainty in global markets.
Bitcoin, the leading cryptocurrency, fell by as much as 3.6 per cent, dropping below $US92,000 during Monday’s Asian trading hours. Other digital tokens faced even more substantial losses, with Ether, the second-largest digital asset, losing 4.9 per cent of its value, and Solana plummeting by 8.6 per cent. This selloff resulted in approximately $US100 billion being wiped off the total value of the cryptocurrency market, according to data from CoinGecko.
Trump’s weekend announcement indicated a 10 per cent tariff on goods from eight European nations, set to begin on February 1 and potentially rising to 25 per cent in June, contingent on a deal for the “purchase of Greenland.” This statement triggered a slump in US equity-index futures as trading commenced on Monday, while traditional safe-haven assets such as gold and silver surged to record highs.
The proposed tariffs and the associated trade tensions have drawn strong criticism from European leaders. They are now considering halting the approval of a trade agreement reached last year, further escalating concerns about potential economic repercussions and market volatility.
