Disclaimer: Crypto is highly volatile and you could possibly lose all your money, do your own research before investing.
On February 3, 2025, the cryptocurrency market experienced a significant downturn, with over $2 billion in liquidations occurring within a 24-hour period. This sharp decline was primarily attributed to heightened investor anxiety following the announcement of new trade tariffs by U.S. President Donald Trump.
Bitcoin, the leading cryptocurrency, saw its price fall to a three-week low, trading at $94,476.18, with an intraday low of $91,441.89. Ethereum (ETH) also faced a substantial drop, decreasing by 24% to $2,494.33, marking its lowest level since early September. Other cryptocurrencies, including Cardano (ADA) and XRP, experienced significant declines of 25% and 22%, respectively.
The market turmoil was largely influenced by President Trump’s announcement of imposing hefty tariffs: 25% on Mexican and most Canadian imports, and 10% on goods from China, set to commence on Tuesday. This move has unsettled markets, leading to a broad sell-off in risk assets, including cryptocurrencies.
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Caroline Bowler, CEO of Australia-based crypto exchange BTC Markets, noted, “The impacts of Trump’s tariffs are equally being felt in crypto markets, with over $2 billion wiped out in liquidations in the past 24 hours.” She highlighted significant reductions in altcoins such as Cardano and XRP, emphasizing the close alignment between the U.S. crypto community and Trump’s economic policies
Despite the downturn, some investors view the price drop as an opportunity. Financial commentator Robert Kiyosaki suggested that the current market conditions present a chance to invest in undervalued assets. He stated, “The best assets in the world are going on sale.
Analysts advise caution during such volatile periods. Digital wealth analyst Sydel Sierra recommended against panic selling, advising investors to adopt a broader perspective. She stated, “When you zoom in on hour period, it’s quite daunting… but if you zoom out.
In summary, the cryptocurrency market’s recent volatility underscores its sensitivity to global economic developments. Investors are encouraged to stay informed and consider long-term strategies when navigating such fluctuations.