Crypto Market Sees Correction Amid Trade Worries
on Friday, Bitcoin and most altcoins experienced a downturn, wiping out some of this week’s gains. Bitcoin’s price fell to $107,300, a 4.12% drop from its recent peak. Ethereum also took a hit,declining by over 8%. The total market cap of all cryptocurrencies, excluding Bitcoin, decreased from $1.28 trillion to $1.19 trillion.
This crypto retreat mirrored the stock market’s performance. Futures linked to major indices like the Dow Jones, S&P 500, and Nasdaq 100 fell by more than 1%, extending the sell-off that began on Monday.
The crypto and stock market declines were linked to renewed trade concerns. President Donald Trump, in a TruthSocial post, stated that trade talks with the european Union were stalled. He threatened a 50% tariff on EU goods, escalating tensions.
Europe hinted at retaliatory tariffs on US goods, including Boeing jets. Ryanair’s CEO warned of canceling a $33 billion Boeing order if US planes faced tariffs. This came a week after Moody’s downgraded the US credit rating and the House of Representatives passed a bill increasing US debt.
However, this crypto correction may not signal the end of the bull run for three reasons. First, the 50% tariff threat is highly likely a negotiation tactic, similar to Trump’s approach with China. Second, Bitcoin is increasingly seen as a safe-haven asset. Since April,spot Bitcoin ETFs have seen over $8 billion in inflows.
Bitcoin’s appeal as a safe-haven stems from its demand and supply dynamics.Institutional demand is rising while supply on exchanges is falling. Lastly, these corrections are normal. Bitcoin has shown resilience,bouncing back from previous drops.
