Bitcoin Falls Below $77,000 As Trump’s Tariffs Erase Election Boost
Key Facts
Bitcoin decreased by 2.1% to nearly $76,608 as of around 9:35 a.m. EDT on Monday, and the cryptocurrency has fallen by more than 6% since reaching a high of $83,731 on Sunday.
Bitcoin has fallen 29% since reaching an all-time high of $109,026 on Trump’s Inauguration Day in January, and the token has nearly erased all of its gains since the day after Election Day, when bitcoin eclipsed $75,500.
Ethereum, the second-largest cryptocurrency by market cap ($182.5 billion) behind Bitcoin ($1.5 trillion), fell by nearly 4% to $1,514, the lowest level for the token since Oct. 21, 2023.
Prices for other cryptocurrencies also fell over the last 24 hours, including XRP (13%), BNB (6.6%), Solana (11%) and Tron (5.5%), while the meme token Dogecoin also dropped by 13%.
Big Number
About $360 billion. That’s how much has been cut from the global crypto market’s aggregate capitalization since reaching $2.78 trillion on April 2, the day Trump announced reciprocal tariffs on U.S. trade partners, after dropping to $2.42 trillion as of Monday morning, according to CoinMarketCap.
Why Are Trump’s Tariffs Impacting Crypto?
“There is a lot of noise at the moment,” wrote Geoff Kendrick, head of Standard Chartered’s digital assets research, in a note Sunday, suggesting investors are pulling away from cryptocurrencies as U.S. markets remain volatile. Julia Zhou, COO of the crypto firm Caladan, told Bloomberg the crypto market is “typically a leading indicator for risk assets,” adding cryptocurrencies would likely “expect sharper corrections” as stocks react to Trump’s tariffs.
How Have Trump’s Tariffs Impacted The U.s. Stock Market?
A two-day selloff after Trump’s tariff announcement last week wiped out more than $4.9 trillion of market capitalization among stocks listed on the S&P 500, with Nvidia, Apple and Tesla leading the largest losses. The Dow Jones Industrial Average, the S&P and tech-heavy Nasdaq dropped at least 10% from their record-highs set in recent months, while the Nasdaq fell into a bear market—a first since 2022—after trading more than 20% below its all-time high set in December. U.S. stocks appeared to fall further early Monday, as futures for the Dow Jones dropped by more than 900 points, while futures for the S&P and Nasdaq dropped 2.9% and 3%, respectively.
Key Background
In the lead-up to Trump’s successful reelection in November, Trump proposed making the U.S. the “crypto capital of the planet.” Trump embraced the crypto industry as he argued the Securities and Exchange Commission under President Joe Biden had a stricter regulatory grip over cryptocurrencies and exchanges. His election win sent bitcoin to several new record highs, including surpassing the $80,000, $90,000 and $100,000 thresholds within a month after Election Day, before setting its record on Inauguration Day. Trump’s campaign was backed by several billionaires with ties to the cryptocurrency industry, including Gemini cofounders Tyler Winklevoss and Cameron Winklevoss and Ripple’s Chris Larsen. Last month, Trump announced he would oversee the creation of a “crypto strategic reserve,” including bitcoin, ethereum, XRP, Solana and Cardano. The announcement was criticized by some, including Coinbase CEO Brian Armstrong, who claimed the “best option” for Trump’s reserve would be “just for bitcoin” to be the “successor to gold” for the government.
Tangent
Just before his inauguration, Trump unveiled the meme coin $TRUMP, a digital investment that quickly rose in value with a market cap that eclipsed $9 billion within days. Trump’s share of the token’s revenue is not immediately clear, though about 80% of unreleased tokens are owned by the Trump Organization affiliate CIC Digital LLC and Fight Fight Fight LLC. First Lady Melania Trump later launched the crypto asset $MELANIA. Trump also launched the crypto firm World Liberty Financial in October, a project that lists his sons Eric, Donald Jr. and Barron as ambassadors.
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