Market Analysis

Bitcoin Slumps Below $84K Amid Fading Trump Crypto Reserve Hype and Trade War Fears

Amos Simanungkalit · 04 Mar99.5K Views

Image Credit: Reuters

Bitcoin dropped on Tuesday, continuing its losses from the previous session as a brief rally triggered by hype over U.S. President Donald Trump's cryptocurrency reserve plan fizzled out. The market’s risk sentiment was further shaken by Trump's imposition of hefty tariffs on China, Canada, and Mexico, escalating a global trade conflict.

Bitcoin fell 10.1%, reaching $83,950, nearing a four-month low, while other major altcoins also suffered significant losses, reversing the gains made after Trump’s initial crypto reserve announcement.

Earlier on Monday, Bitcoin and the broader crypto market surged after Trump outlined five cryptocurrencies, including Bitcoin and Ether, for inclusion in a national crypto reserve. However, Trump did not provide details on how the reserve would be structured or funded. The lack of clarity surrounding his crypto policies dampened the initial optimism.

Trump’s involvement in creating family-themed cryptos has also faced mixed reactions, particularly after his $TRUMP meme token saw a dramatic drop in value since its peak.

Despite this, Trump is set to hold the first White House Crypto Summit on Friday, where he may provide more information about the administration's regulatory plans. He has also appointed several pro-crypto figures to key regulatory positions.

Meanwhile, crypto prices have been struggling since mid-February, with increasing concerns over Trump's tariff decisions. On Tuesday, the president imposed a 20% tariff on China and 25% on Canada and Mexico, which, while not directly affecting crypto markets, dampened investor risk appetite. This led to a broader market retreat, with safe-haven assets like the Japanese yen and gold seeing increased demand.

As a result, the broader crypto market saw significant declines on Tuesday, wiping out the gains from Trump’s reserve announcement. Ether fell 14% to $2,106.28, XRP dropped 16.1% to $2.3597, and Solana and Cardano, both mentioned for the reserve, slid 18.9% and 22.7%, respectively. Meme tokens, including Dogecoin, dropped 15.2%, while $TRUMP fell 22.8%, nearing record lows.