Bitcoin declined on Tuesday, continuing its retreat from recent highs, as market sentiment soured after President-elect Donald Trump announced plans for new trade tariffs targeting China and other countries. The cryptocurrency dropped 3.6% to $94,567.1 by 00:49 ET (05:49 GMT), marking a pullback from last week’s record of over $99,000, driven in part by profit-taking after failing to surpass the $100,000 mark.
The earlier rally in Bitcoin was fueled by optimism around Trump’s pro-crypto stance, including promises to establish the U.S. as a global hub for cryptocurrency innovation. However, Trump’s threats to impose a 10% import tariff on China and 25% on Canada and Mexico raised fears of a renewed global trade war, dampening risk sentiment. Concerns over the economic impact of these tariffs have weighed on growth prospects and risk-driven assets, including cryptocurrencies.
Broader markets also reacted negatively, with a rise in the U.S. dollar nearing its recent two-year high, further pressuring Bitcoin. Meanwhile, investors remain focused on the potential for crypto-friendly policies under Trump’s administration, with key cabinet appointees showing favorable views toward the sector. Markets are now awaiting specific policy details from President-elect Donald Trump once he takes office in January. Bitcoin’s recent weakness has affected other cryptocurrencies and related assets this week, with MicroStrategy, the largest corporate holder of Bitcoin, experiencing a decline after its recent surge to record highs. Last week, MicroStrategy disclosed a purchase of over $5 billion in Bitcoin.
On Tuesday, most major altcoins followed Bitcoin’s downward trend, with Ethereum slightly rising to $3,242.17. Meanwhile, XRP dropped by 1.4% following last week’s gains, spurred by news that SEC Chair Gary Gensler will step down in January. Other cryptocurrencies like Solana, Cardano, and Polygon saw losses between 1.9% and 6.3%, while meme token Dogecoin fell by 4.2%.
