The crypto market has faced a sharp decline, with BTC, ETH and major altcoins like Cardano dropping. A main trigger behind this selloff is U.S. President Donald Trump’s newly imposed tariffs on imports from China, Canada, and Mexico. These trade restrictions have unsettled global markets, leading to a broader retreat from riskier assets, including cryptocurrencies.
Ethereum (ETH), the second-largest cryptocurrency, plunged 15.75%% in just a day, reaching $2,581 on February 3rd, while Bitcoin fell to a three-week low of approximately $92,584. The fear that escalating trade tensions could slow economic growth and drive inflation has prompted investors to move away from volatile markets.
Current market state. Source: CoinMarketCap
Adding to the uncertainty, India is reconsidering its approach to digital assets as more countries embrace crypto-friendly regulations. Economic Affairs Secretary Ajay Seth noted that cryptocurrencies operate beyond national borders, pushing India to rethink its policies to stay competitive. This uncertainty has contributed to market fluctuations as investors brace for potential regulatory shifts.
Meanwhile, Trump’s executive order has established the Working Group on Digital Asset Markets, an advisory body focused on shaping crypto policies and assessing the possibility of a national crypto reserve. However, the absence of immediate pro-crypto measures has left some investors disappointed, leading to further market weakness.
Overall, the ongoing market decline is driven by a combination of economic policies, geopolitical tensions, and regulatory uncertainty. With crypto trading around the clock, its prices remain highly responsive to global events, and until clearer regulations and trade policies emerge, volatility is likely to continue.
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