Crypto Prices Fall After U.S. Adds New Trade Tariffs
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The prices of popular cryptocurrencies dropped a lot in the past 24 hours. Some coins lost a quarter of their value after the U.S. introduced new trade tariffs on Canada and Mexico over the weekend. Many investors are now worried that a trade war could happen, and this fear is affecting risky investments like crypto.
XRP, Dogecoin (DOGE), and Cardano’s ADA all lost more than 25% of their value. These coins had been growing since December, but now their prices have fallen back to where they were in early November, before the U.S. election. Reports show that over the past month, most popular cryptocurrencies have lost 40-50% of their value. Experts say this is one of the worst drops in recent years.
The Crypto Market Dropped By 12% In Value
The total value of the cryptocurrency market went down by 12% in a single day. This is the biggest drop in over a year. A list of the top 20 cryptocurrencies, called the CoinDesk 20 (CD20), dropped 10%. Bitcoin (BTC), the most well-known cryptocurrency, lost 6% of its value.
Traders who invest in future prices of cryptocurrencies also lost a lot of money. People trading ether (ETH) futures lost over $600 million in the past 24 hours, mostly during early trading hours in Asia. Bets on XRP and DOGE lost a total of $150 million, while futures connected to other smaller cryptocurrencies lost $138 million. Futures connected to ether lost $84 million.
Overall, more than $2.2 billion in trades were wiped out. This is the largest amount this year and one of the biggest in the past 12 months. A single trade on Binance, where a trader bet on ether using tether (USDT), lost $25 million.
Experts Warn Of Even Lower Cryptocurrency Prices
Some experts warned that prices could drop even more as the week goes on. Augustine Fan, head of insights at SignalPlus, explained that Ethereum’s price drop of 20% surprised many traders. He said Ethereum was acting like a smaller cryptocurrency because it does not have strong long-term investments from large financial companies. He also pointed out that there are no clear reasons for Ethereum’s price to rise soon.
The main reason for this market drop is the new trade tariffs put in place by U.S. President Donald Trump. The U.S. has added a 25% tax on goods coming from Canada and Mexico. This decision has caused problems in trade between these countries. Canada and Mexico have already warned that they might respond by adding their own tariffs on U.S. products.
Many investors are worried that these new taxes will increase the price of everyday goods. This could harm businesses in many industries, including car manufacturing and farming. Because the U.S., Canada, and Mexico depend on each other for trade, these changes could slow down the economy. If that happens, people could lose jobs, and prices for food and other goods might rise.
