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(Bloomberg) — A rout in Bitcoin deepened on Friday as investors rushed to safe assets in the wake of US President Donald Trump’s latest tariff threats, marking a dramatic reality check for one of the most popular Trump trades.
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The cryptocurrency tumbled as much as 7.2% on Friday to the lowest since early November and is down some 27% since it hit an all-time high less than six weeks ago. The selloff came amid a broad plunge in cryptocurrencies, with Ether, Polkadot and XRP all dropping more than 7% on Friday.
“The last time we saw sentiment like this was 2022,” said Caroline Bowler, chief executive officer of BTC Markets Pty Ltd, referring to the “crypto winter” when prices plummeted amid rising interest rates and industry woes. “This tanking can be viewed as a response to macro fears on Trump’s tariffs and geopolitical uncertainty.”
Trump said Thursday that 25% tariffs on Canada and Mexico would come into force from March 4, undermining hopes he might reverse course after a previous delay. He also said Chinese imports would face a further 10% levy, prompting officials in Beijing to promise “all necessary measures” in response.
The focus on trade tensions led to a broad risk-off decline across markets on Friday, pushing down almost all Asian stock markets and fueling declines in European futures. But cryptocurrencies — which are deeply exposed to shifts in risk appetite — were among the worst hit.
Bitcoin has now fallen more than 20% in February. If the decline holds through the end of Friday, it would mark the biggest monthly drop since June 2022.
Trump Trade Woes
The selloff underscores a swift change of fortunes for what was previously one of the most popular Trump trades in global markets: buying Bitcoin on the expectation that the president’s crypto-friendly approach would lead to a broad rally.
That worked for a while. Bitcoin hit its all-time high of $109,241 on Jan. 20, the day of Trump’s inauguration. But cryptocurrencies have recently come under pressure amid worries that Trump’s pugilistic approach to global trade could lead to broad pain.
“Given the macro environment, it’s not surprising to see we are where we are,” said Stefan von Haenisch, director of over-the-counter trading in Asia Pacific at crypto custody firm Bitgo Inc. Traders are still waiting for Trump to come up with concrete steps for the sector including a Bitcoin stockpile, he said.
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