Bitcoin and top altcoins slide as Trump kicks off reciprocal tariffs
- The US will impose reciprocal tariffs on international trading partners based on half of each country's respective rates.
- The baseline tariffs will be 10% on all imports and 25% on foreign-made cars.
- Bitcoin and other top cryptocurrencies, including Ethereum, Solana and XRP, saw major declines following the tariff announcement.
Bitcoin (BTC) and the entire crypto market saw a quick correction on Wednesday following President Donald Trump's reciprocal tariff announcements based on half of each country's respective rates. The tariffs also include a 10% baseline tariff on imports and 25% on foreign-made automobiles.
Following the announcement, Bitcoin fell 2% while Ethereum (ETH), XRP and Solana (SOL) noted declines of 4%, 3% and 4%, respectively, according to FXStreet asset price page.
Bitcoin, crypto react sharply as Trump tariffs spark market volatility
In the "Make America Wealthy Again" event at the White House on Wednesday, President Trump announced global reciprocal tariffs ranging from 10% to 50%, with Canada and Mexico as exceptions.
The tariffs will affect 185 countries, making it one of the largest tariffs in US history. The tariffs will be 50% of the rates imposed by a country on the US, with a 10% baseline for other countries not listed among the 185.
Tariffs on cars will go live on Thursday and baseline tariffs on Saturday, while reciprocal tariffs will commence on April 9.
The tariff announcement sparked major declines across top cryptocurrencies, with the entire crypto market capitalization dropping by 5%.
Bitcoin declined 2%, falling toward $83,000 at publication time. Top altcoins Ethereum, XRP and Solana also took quick hits, diving 4%, 3% and 4%, respectively.
As a result, crypto futures liquidations accelerated to $511.77 million in the past 24 hours, per Coinglass data. Bitcoin traders had the highest share of liquidations worth $179.71 million. The decline in crypto prices reflects a broader risk-off sentiment in the financial markets.
“The initial market ‘shock’ may likely spike volatility, but it should be a short-term effect. As for long-lasting ones, a lot will depend on how quickly the market adjusts to major changes,” Arthur Azizov, Founder of B2 Ventures told FXStreet.
The traditional stock market also saw sharp declines after the tariff announcements. The S&P 500 fell 3.7%, erasing $2 trillion of its market cap.
US Treasury Secretary Scott Bessent commented on the harsh declines across US stocks in a Wednesday interview on Bloomberg TV, stating that "the Nasdaq peaked on DeepSeek day so that's a Mag 7 problem, not a MAGA problem."
Several other crypto asset categories saw declines, including Artificial Intelligence, Memes, Real-world assets (RWA) and DePIN sectors dropping by 4%, 3%, 4% and 2%, respectively.
Bitcoin, altcoins, stablecoins FAQs
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
Author
Michael Ebiekutan
FXStreet
With a deep passion for web3 technology, he's collaborated with industry-leading brands like Mara, ITAK, and FXStreet in delivering groundbreaking reports on web3's transformative potential across diverse sectors. In addi
