Bitcoin fell as much as 5% on Monday, briefly dropping below $65,000, after Donald Trump announced plans to raise global tariffs to 15%.
MARKET INSIDER – The move added fresh uncertainty around inflation, trade flows, and global growth, prompting investors to trim exposure to risk assets.
The world’s largest cryptocurrency has been under sustained pressure since peaking above $125,000 in October. It is now down roughly 26% year-to-date and has shed more than 47% from its record high. The latest leg lower underscores crypto’s sensitivity to macro policy shocks, even as Asian equity markets opened higher—highlighting a short-term divergence between digital assets and regional stocks.
Market participants point to multiple overlapping drivers. According to industry executives, the abrupt tariff increase may be accelerating defensive positioning among investors bracing for a broader market downturn. At the same time, rising geopolitical tensions—particularly the buildup of U.S. military forces around Iran—have intensified global risk concerns. Trump has indicated he could decide within days whether to authorize strikes, raising fears of wider regional disruption.
Analysts also note that the sell-off reflects structural fragility rather than a single headline catalyst. Thin liquidity conditions and weak conviction have amplified price swings. Research from 10x Research suggests the move is consistent with a classic bear-market phase characterized by lower volumes and election-cycle uncertainty in the U.S., with downside risk potentially extending toward $50,000 before a more durable bottom forms.
The divergence between bitcoin and traditional safe havens was notable. Spot gold rose more than 1%, reinforcing its role as a defensive asset during geopolitical stress. The contrast challenges bitcoin’s “digital gold” narrative, a label occasionally referenced by policymakers including Jerome Powell in broader discussions about crypto’s positioning in financial markets.
By early U.S. trading hours, bitcoin had trimmed losses, down roughly 2.6% near $65,600. Ether declined about 3% to below $1,900. Earlier this month, bitcoin touched a one-year low near $63,100, reinforcing the volatility profile that continues to define the asset class.
Strategically, investors are balancing cyclical crypto dynamics—often described as a four-year halving-driven cycle—with macro headwinds including tariff escalation, geopolitical risk, and evolving Federal Reserve leadership expectations. Until policy clarity improves and liquidity conditions stabilize, bitcoin is likely to remain highly reactive to global risk sentiment rather than trade independently as a hedge.
