Why is Crypto Crashing Today? Bitcoin, Ethereum, DOGE, and More Plummet Amid Trade War Concerns

Fears of a global trade war triggered a major sell-off in cryptocurrency markets on Monday, affecting both mainstream and meme coins alike.

This morning, cryptocurrency investors are facing a significant downturn. As of now, major cryptocurrencies like Bitcoin, Ethereum, and XRP are seeing steep declines, while popular meme coins such as Dogecoin and $TRUMP are also experiencing sharp drops.

What’s Causing the Crypto Crash?

Trade War Tensions Escalate

Over the weekend, former President Donald Trump announced sweeping tariffs on goods from some of America’s biggest trading partners. Tariffs as high as 25% were imposed on various imports from Canada and Mexico, alongside an additional 10% tariff on certain Chinese goods. Trump also hinted at similar measures for goods imported from the EU.

While tariffs are not directly paid by exporting countries, they burden the companies importing those goods into the U.S. For example, a retailer like Walmart would have to pay tariffs on products it brings in from Mexico, or a U.S. energy company would cover tariffs on Canadian gas imports.

To maintain profitability, these companies are expected to pass the extra costs on to American consumers, driving up prices. In response, Canada has already imposed retaliatory tariffs on U.S. goods, and Mexico has announced plans to follow suit. A similar reaction is expected from China and possibly the EU, escalating fears of a full-blown global trade war.

Economic Uncertainty Weighs on Markets

Trade wars tend to raise costs for both businesses and consumers, dampening spending and impacting corporate profits. The resulting inflationary pressures and economic uncertainty are unsettling for all markets, including cryptocurrencies, which are particularly sensitive to such instability.

Crypto Markets React to Economic Jitters

The potential for a global trade war is sending shockwaves through the crypto market. As of now:

• Bitcoin has fallen nearly 4%, hovering just above $95,000 per coin.
• Ethereum and XRP have dropped over 16%.
• Cardano has plunged more than 19%.
• Meme coins like Dogecoin and $TRUMP are down 13% and 14%, respectively.

While these coins aren’t directly affected by the tariffs, economic uncertainty often prompts investors to secure their gains by selling volatile assets like cryptocurrencies. Additionally, crypto markets, known for their volatility, are more prone to sell-offs during periods of global economic instability.

Profit-Taking and Volatility Amplify the Drop

Some of the decline could be attributed to profit-taking. Cryptocurrencies have performed well recently, and concerned investors may now be cashing out their gains. Furthermore, the inherently volatile nature of the crypto market, combined with fears of reduced demand amid economic turmoil, likely contributed to today’s losses.

Stock Markets Also Hit Hard

It’s not just cryptocurrencies feeling the pressure—stock markets are reeling too. U.S. stock futures are down significantly, with:

• Dow Futures dropping over 560 points (1.26%).
• S&P Futures falling by 85 points (1.4%).
• Nasdaq Futures losing 349 points (1.62%).

The duration of Trump’s tariffs remains unclear, as does the full scope of retaliation from countries like Mexico, China, and potentially the EU. What is certain is that uncertainty will dominate both crypto and stock markets in the near term.