Cryptocurrency prices dropped on Monday, with Bitcoin hitting a three-week low and Ether falling to its lowest point since early September.
The uncertainty surrounding a potential global trade war spooked investors, driving them away from risky assets.
Bitcoin, the largest and the most popular cryptocurrency, fell to $94,476.18 early Monday in Asia, reaching a low of around $91,441.89.
Meanwhile, smaller cryptocurrency Ether dropped about 24%, reaching levels last seen in early September, and was last priced at $2,494.33.
Over the weekend, U.S. President Donald Trump imposed 25% tariffs on Mexican and most Canadian imports, along with 10% tariffs on goods from China, effective Tuesday.
In retaliation, Canada and Mexico, the U.S.’s top two trading partners, quickly promised countermeasures, while China stated it would challenge Trump’s tariffs at the World Trade Organization.
Cryptocurrencies trade continuously, including on weekends, and have recently shown increased sensitivity to overall market sentiment.
“Crypto is really the only way to express risk over the weekend, and on news like this crypto resorts to a risk proxy,” said Chris Weston, head of research at Pepperstone.
At the same time, downward pressure on crypto has increased following a strong rally after Trump’s election, as some investors have felt disappointed by the lack of immediate actions to support crypto or ease regulations since he assumed office.
Bitcoin reached a record high of $107,071.86 on January 20, the day Trump was inaugurated as the 47th U.S. President.
It has risen 40% since the November election, driven by hopes for crypto-friendly regulations under the Trump administration.
Last month, Trump directed the establishment of a cryptocurrency working group responsible for proposing new digital asset regulations and investigating the creation of a national cryptocurrency stockpile.
