The cryptocurrency market continues to face a significant correction, down 2,7% in the last few hours, due to trade tensions and economic uncertainty generated by President Trump's policies.
The fall that the crypto market has been experiencing in recent weeks, and which continues today, is the result of a combination of economic and political factors that have generated global uncertainty. These factors include, mainly, Donald Trump's trade policies, whose tariffs and protectionist measures have sown fear among investors.
Bitcoin and Ethereum, the two largest cryptocurrencies by market capitalization, have led the losses. While Bitcoin, considered “digital gold,” has seen its value decline, Ethereum, the leading platform for decentralized applications, has also suffered a notable decline. This correction in the prices of the main cryptoassets reflects the growing interconnection between the cryptocurrency market and traditional economic indicators.
BUY BITCOINCryptocurrency market loses 2,7% due to economic fears
The 2,7% decline in the aggregate value of cryptocurrencies is a reflection of a global economy under stress. Persistent inflation, rising interest rates and geopolitical tensions have created a climate of uncertainty that affects all markets, including the cryptocurrency market.
Source: CoinMarketCap
The correlation between cryptocurrency performance and traditional economic indicators has strengthened in recent years. As cryptocurrencies have become more integrated into the global financial system, their sensitivity to macroeconomic events has increased. For example, an increase in interest rates by the Federal Reserve may discourage investment in risky assets, such as cryptocurrencies, as investors seek refuge in safer assets.
Tensions between the United States and its trading partners, such as Mexico, Canada and China, exacerbated by President Trump's tariff policies, have also generated a wave of uncertainty that has spread to global financial markets. Investors, faced with an increasingly complex economic outlook, have reduced their exposure to risky assets, putting downward pressure on cryptocurrency prices.
GO TO BIT2ME LIFETrump's trade policies: A key factor in the fall of cryptocurrencies
Donald Trump's trade policies, characterised by tariffs and bilateral agreements, have sown uncertainty in the global economy. These measures, although designed to protect domestic industry, have generated friction with other countries, disrupted supply chains and increased costs for businesses and consumers.
The US trade war, triggered by the imposition of new tariffs, has been a clear example of the impact of these policies on the crypto market. In addition, “America First” policies have weakened multilateral institutions and undermined international cooperation on issues such as trade and climate change. This lack of coordination has generated a climate of mistrust that has spread to financial markets, including cryptocurrencies and digital assets.
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Bitcoin and Ethereum lead losses in bear market
Bitcoin and Ethereum, the two largest cryptocurrencies by market capitalization, are leading the losses in this bear market. Bitcoin, which had hit an all-time high of $109.000 in January, has seen a significant correction, while Ethereum, which surpassed $4.000 in December, has now also seen a significant drop in value.
Source: CoinMarketCap
Several factors explain the losses in Bitcoin and Ethereum. First, profit-taking by investors who had accumulated significant gains during the market boom earlier in the year, driven by Trump's inauguration. Second, the more aggressive policy of the Federal Reserve, which has reduced the attractiveness of risk assets such as cryptocurrencies. And third, concerns about trade tariffs, which have created uncertainty about the future of the markets.
Moreover, other specific developments have also affected Bitcoin and Ethereum, playing a major role in their downfall. For example, the Bybit hack, in which it lost $1.400 billion worth of ETH, and the possibility of further refunds by Mt. Gox, which has been moving its BTC funds to new addresses. The latter, while generating excitement, also creates uncertainty among investors about its short-term impact on the market.
BUY ETHEREUM (ETH)In conclusion, the recent fall of the cryptocurrency market, with a 2,7% drop in the last few hours, reflects the interconnection between the cryptocurrency world and the global economy. Trump's trade policies, along with factors such as inflation and rising interest rates, have created a climate of uncertainty that has affected Bitcoin, Ethereum and the crypto ecosystem in general.
While bear markets are a normal part of the cryptocurrency life cycle, the growing interconnection with traditional economic indicators poses new challenges, and also opportunities, for the future of these digital assets.
Investing in cryptoassets is not fully regulated, may not be suitable for retail investors due to high volatility and there is a risk of losing all invested amounts.
