10.02.2025 15:03
Cryptocurrency markets started the new week with a significant loss in value. The decline in Bitcoin and altcoins is causing concern among investors. As the question of why Bitcoin and altcoins dropped today arises, Trump's newly announced decision has become a focal point of interest. Here are the latest developments...
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Why did Bitcoin and altcoins drop today?
The announcement by U.S. President Donald Trump that he would impose a 25% tariff on all steel and aluminum imports has increased trade tensions, leading to a decline in the crypto markets.
On Monday, following Trump's announcement of these new tariffs, the total value of the cryptocurrency market fell by 3%. Trump stated during a press conference on his way to the NFL Super Bowl event on Sunday that he would make significant changes to trade policies, including increasing metal tariffs.
He also indicated that "reciprocal tariffs" would be implemented on Tuesday or Wednesday. These new tariffs will cover all countries and will correspond to the tariff rates each country applies to U.S. goods.
The U.S. imports the most steel from Canada, Brazil, and Mexico, while South Korea and Vietnam are also significant suppliers.
Bitcoin fell by 0.5% to $96,871, while Ethereum dropped by 1.5% to $2,627. XRP lost 4.2% to fall to $2.39, and Dogecoin similarly saw a 4.2% decline, trading at $0.2486.
Crypto trading volumes have returned to pre-Trump levels
According to 10X Research, crypto trading volumes have experienced a sharp decline, returning to levels seen before Trump's election. Additionally, it is noted that the effects of the Bitcoin Strategic Reserve announcement may take up to six months to fully materialize.
As uncertainty continues in the market, large investors have started to shift from altcoins to Bitcoin. As a result, Bitcoin's market dominance has remained above 60%, while the altcoin and memecoin rally quickly came to an end.
Last week was also challenging for cryptocurrency investors. There were widespread declines across the entire digital asset sector.
Tariffs are slowing down the economy
James Toledano, COO of Unity Wallet, emphasized that Bitcoin is particularly sensitive to macroeconomic fluctuations with the following words:
"Decisions like tariffs signal a slowdown in the economy. This reduces investors' risk appetite and creates selling pressure on both traditional and digital assets."
Toledano noted that foreign policy decisions lead to volatility in the crypto markets, stating that such moves affect global economic expectations, liquidity, and investor behavior. While uncertainty causes fluctuations in the markets, he mentioned that clear policies—whether positive or negative—help stabilize the markets, adding:
"We experienced a similar process during Trump's first term. Although the tariffs imposed in 2018-2019 did not directly cause inflation, the financial markets and the cryptocurrency ecosystem (especially Bitcoin) were significantly affected. Today, we are seeing a similar picture."
Analysts suggest that Bitcoin prices may consolidate at these levels for a while longer, but significant developments that could move the market may trigger a rise. Regulatory announcements, technological advancements related to the Bitcoin network, or macroeconomic events that could change investor sentiment may lead to a shift in market direction.
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