The cryptocurrency market tumbled Tuesday just two days after a surge as investors brace for President Donald Trump’s tariffs on Canada and Mexico to take effect.
Digital asset values rose sharply after Trump announced a “crypto strategic reserve” Sunday, which he said will include Bitcoin, Ethereum, XRP, Solana and Cardano — the five largest and most actively traded cryptocurrencies. Those gains evaporated after the president moved forward with his long-threatened 25% tariff on nearly all imports from Canada and Mexico, which took effect at midnight Tuesday morning, according to a Department of Homeland Security (DHS) notice.
“And I would just say this to people in Canada or Mexico: if they’re going to build car plants, the people that are doing them are much better off building here, because we have the market,” Trump told reporters Monday. “We’re the market where they sell the most.”
The trade tension sent Bitcoin prices tumbling over 10%, with similar decreases for the other coins included in Trump’s proposed crypto reserve.
Claudia Sheinbaum, Mexico’s president, said she will announce “tariff and non-tariff” measures Sunday in retaliation to American tariffs in a press conference Tuesday.
Justin Trudeau, Canada’s prime minister, also announced retaliatory 25% tariffs on American goods in a press conference Monday. Canada and Mexico are the two largest U.S. trade partners.
“Our tariffs will remain in place until the U.S. trade action is withdrawn, and should U.S. tariffs not cease, we are in active and ongoing discussions with provinces and territories to pursue several non-tariff measures,” Trudeau said.
Commerce Secretary Howard Lutnick defended the president’s tariffs in a Monday interview on CNBC News.
“Hopefully Mexico will understand that this is not a trade war,” he said. “This is a drug war. If they can stop the flow of fentanyl, and they can prove to the president they can stop the flow of fentanyl, then of course the president can remove these tariffs. But you’ve seen it, it has not been a statistically relevant reduction of deaths in America.”
Trump, who said cryptocurrency was “not money” and “based on thin air” in 2019, became increasingly friendly with the industry throughout his 2024 presidential campaign, promising to foster a more crypto-friendly regulatory environment and potentially position the U.S. as a leader in the digital asset space. In the month following his election last November, Bitcoin surged more than 40% to all-time highs, surpassing $100,000.
Bitcoin’s price hovered around $82,000 as of Tuesday morning.
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