Virtual Asset Market Plummets Amid Trade War Tariffs

Bitcoin Falls Below $100,000 Amid Intensifying Tariff War
"Risk Aversion Sentiment Grows"
"U.S. Government Friendly to Virtual Assets... High Potential for Rebound"

The virtual asset market is experiencing a sharp decline. This is due to concerns over global trade disputes triggered by a tariff war initiated by the United States. However, since the issue is not with the virtual assets themselves, there are prospects for a rebound depending on market conditions.

According to CoinMarketCap, a global virtual asset market status relay site, as of 4:16 PM on the 3rd, Bitcoin was trading at $94,205, down 5.99% compared to the previous trading day (24 hours earlier). Ethereum (down 17.94%), Ripple (down 19.06%), and Solana (down 7.59%) also fell sharply. Additionally, meme coins such as Doge and Official Trump dropped by 19.95% and 12.41%, respectively.

The downward trend of Bitcoin has continued since the end of last month. Bitcoin, which was at $105,000 at 10 AM on the 31st of last month, continued to decline and fell below $100,000 on the 2nd of this month.

The decline is interpreted as a risk-asset avoidance phenomenon due to the tariff imposition measures by U.S. President Donald Trump. On the 1st of this month (local time), President Trump signed an executive order imposing tariffs on Canada, Mexico, and China under the International Emergency Economic Powers Act (IEEPA).

As a result, starting from the 4th, a 25% tariff (10% on oil and natural gas) will be imposed on Canadian goods, a 25% tariff on all Mexican products, and an additional 10% tariff on Chinese products. In response, Canada and Mexico have announced retaliatory tariffs, sparking a tariff war.

Hong Seong-wook, a researcher at NH Investment & Securities, explained, "The virtual asset market rose significantly due to expectations of deregulation after Trump's election, and President Trump expressed his commitment to fulfilling his pledges through personnel appointments and executive orders around his inauguration. However, after the executive order, the market is waiting for follow-up news, and profit-taking sales are underway. The market is also synchronizing with the risk asset market shaken by the Deep-sea shock and tariff issues."

Kim Min-seung, head of the Kobit Research Center, said, "There have been many events negatively affecting risk asset sentiment, such as Japan's interest rate hike, the Deep-sea shock, the Federal Reserve's rate freeze, and the tariff war. It seems that the lack of short-term positive factors in the virtual asset market has led to a selling spree." He added, "There are no adverse factors or price decline reasons inherent to virtual assets themselves."

In particular, as President Trump has repeatedly stated his intention to impose tariffs on the European Union (EU), global trade conflicts are expected to expand further. Due to these concerns, volatility is expected to continue for some time.

However, there is also analysis that the growth potential remains high since the Trump administration is friendly to virtual assets. Last month, President Trump signed an executive order to launch a dedicated task force for virtual assets.

Researcher Hong said, "Whether the virtual asset industry gradually activates due to regulatory changes is important for the market direction. Although market sentiment may temporarily weaken, it is necessary to remember that the industry is likely to grow eventually as a U.S. government and financial authorities friendly to virtual assets have been inaugurated."