Cryptocurrency giant Bitcoin plunged on Sunday as the market experienced risk aversion after President Donald Trump targeted Canada, Mexico and China with threatening import tariffs.
At midday on Monday, Bitcoin was down 3.33% at $94,427 since it opened at the start of the day.
The decline began Saturday night after Trump signed an executive order imposing a 25% tariff on imports from Mexico and Canada and a 10% duty on China that will take effect on Tuesday.
Jeff Park, Chief Strategist at Alfa Bitwise Asset Management, said the ongoing tariff war would be significant for Bitcoin in the long term due to the weakness of the dollar and US rates.
He added that while many believe Bitcoin is a hedge against inflation and long-term market uncertainty, it is still traded as a risky asset in the short term and has reacted negatively to the current trade war.
For now, investors are waiting for further support at $90,000 in Bitcoin and are turning on deeper pullback warnings towards $80,000.
Bitcoin has surged 16% from its January 20 record of $109,350.72 and the effect has been familiar to the market for years with corrections of around 30% during bull markets.
