Bitcoin (BTC), the dominant cryptocurrency by market capitalization and the only major asset actively trading over the weekend, began the trading week in Asia with a noticeable decline.
The drop in Bitcoin’s price likely reflects growing fears about the impact of an escalating trade war on global growth. Canadian Prime Minister Justin Trudeau announced that Canada would impose 25% tariffs on U.S. goods, including drinks and appliances, in response to President Donald Trump’s recent tariffs. Trump had imposed a 25% tariff on imports from Canada and Mexico, as well as a 10% tariff on Chinese goods. In retaliation, China announced plans to challenge the U.S. at the World Trade Organization and warned of unspecified countermeasures to protect its economic interests.
The resurgence of trade tensions, combined with mass deportations of illegal migrants from the U.S., has raised concerns about higher inflation, which could diminish the likelihood of the Federal Reserve implementing swift rate cuts. These factors appear to be weighing on Bitcoin’s price, with the broader cryptocurrency market following suit. The CoinDesk 20 Index also dropped by more than 2% in response to the risk-off sentiment spilling over into both crypto and traditional markets.
