Market Volatility Amid Trade War Jitters
In February 2025, escalating U.S.–China trade tensions led to significant crypto market turbulence. The announcement of new U.S. tariffs on Chinese goods prompted fears of a trade war, triggering a broad sell-off across financial markets.
Bitcoin's Sharp Decline
Bitcoin (BTC) experienced a notable downturn during this period. The cryptocurrency briefly plunged to a three-week low, trading around $78,000, as investors reacted to the escalating trade tensions.
Altcoins Also Affected
The sell-off wasn't limited to Bitcoin. Approximately 25% of the top 100 cryptocurrencies saw their values drop by over 20% within a 24-hour span. Ethereum (ETH), the second-largest cryptocurrency by market capitalization, wasn't spared, experiencing a decline of nearly 25% over a weekend and is currently trading around $1900.
High-Risk Asset Class
This period of volatility underscores the classification of cryptocurrencies as a high-risk asset class. Digital assets remain highly sensitive to global economic events, reacting sharply to geopolitical and economic tensions.
Market Rebound?
By early March, as trade tensions showed signs of easing and positive developments emerged—such as the U.S. government's announcement of a Strategic Bitcoin Reserve—the crypto markets started to rebound, but it was short lived and now the market is quite down compared to where it used to be. Let's see where the market will go from here.
