Cryptocurrency markets slid sharply on Monday after President Donald Trump announced a new round of tariffs on goods from Canada, Mexico, and China, triggering a global wave of risk aversion. Bitcoin dropped below $100,000 for the first time in weeks and touched a low of about $92,000 before recovering. Meanwhile, ether, dogecoin, and other digital tokens lost more than 10% on the heels of the weekend announcement.

The world's largest cryptocurrency hovered near $99,000 by Monday morning, staving off deeper losses after Trump temporarily paused the 25% levy on Mexican imports. Yet analysts warn that the overall climate remains volatile. "Those are riskier cryptos" than bitcoin, said Garrick Hileman, an independent cryptocurrency analyst. "But it's a little surprising how big the gap is."

Trump's move also took aim at Chinese imports, imposing a 10% tariff and closing a loophole that let Chinese e-commerce firms ship smaller, duty-free packages into the U.S. The new trade barriers prompted immediate promises of retaliatory measures from Canada and Mexico, with China vowing to file a complaint at the World Trade Organization. Almost a quarter of the top 100 digital assets shed 20% or more over the weekend, according to data from CoinGecko.

Bitcoin's downturn highlights the broader impact of mounting economic tensions. Over the weekend, Trump warned of "some pain" from the tariffs, which he said would be "worth the price," further predicting duties would "definitely happen" with the European Union and possibly the United Kingdom. These developments come as cryptocurrencies, once considered a fringe technology, are deeply intertwined with mainstream market sentiment.

Fears of a protracted dispute have spread to stock exchanges worldwide. Shares of U.S. crypto exchange Coinbase declined 5.5% in pre-market trading on Monday. While bitcoin found some footing, smaller tokens were harder hit. Ether, for instance, slumped nearly 25% in three days, bringing its value to about $2,592.14, marking its sharpest drop since November 2022.

"Crypto is really the only way to express risk over the weekend, and on news like this crypto resorts to a risk proxy," said Chris Weston, head of research at Pepperstone. The tumult also battered Trump's own meme coin, which fell below $20-well off its record above $73. First Lady Melania Trump's meme coin has plummeted nearly 90% from its own peak, trading at around $1.50. Meme coins, known for their volatility, tend to surge when hype flourishes and collapse just as quickly.

Bitcoin retains some resilience, partly due to its status among investors as a hedge in unpredictable market conditions. "What we've been seeing isn't so much that ether is being uniquely hard-hit (most of the market is down similarly or worse) but rather that bitcoin is holding up uniquely well," said Joseph Edwards, head of research at Enigma Securities. Observers say bitcoin's relative strength also lies in the ease of selling off more speculative tokens during moments of panic.

Trump's election initially fueled bullish sentiment in crypto circles. Markets soared on hopes that his pro-crypto outlook-evidenced by promises to make the United States the "crypto capital of the planet"-would spur friendlier regulations. While bitcoin peaked near $109,000 after Trump's win, enthusiasm has since been tested by slow-moving policy changes and, more recently, the looming possibility of a trade war.

Optimists believe the overarching trend remains positive. Paul Howard, senior director at crypto market-maker Wincent, noted: "the organic growth we anticipate over the coming years in part due to the friendlier U.S. administration will likely outweigh the short term volatility and macro economic (tariff) news the next few weeks." Despite the immediate fallout, bitcoin is still trading near historic highs and has gained about 40% since early November, when Trump secured the presidency.

Recent Crypto Market Highlights:

  • Bitcoin Low: Fell to $92,000, rebounded to ~$99,000.
  • Ether Loss: Down nearly 25% in three days.
  • Meme Coins: Trump's meme token slid below $20; Melania Trump's fell 90% from its high.
  • Tariff Spread: 25% on Canada and Mexico, 10% on China, with more threatened on the EU and possibly the UK.

Trump's past skepticism toward crypto has morphed into open support, including the formation of a national "cryptocurrency working group" immediately after his inauguration. Still, disappointment lingers among market players who hoped for aggressive moves such as direct government bitcoin purchases or immediate deregulation.