Bitcoin fell sharply on Wednesday, mostly wiping out a recent rebound as U.S. President Donald Trump’s steep trade tariffs took effect, sparking widespread losses in financial markets.
Sentiment towards Bitcoin was also spooked by Michael Saylor’s Strategy (NASDAQ:MSTR)- the biggest listed holder of Bitcoin- reporting a $5.91 billion, unrealized loss on its digital asset holdings.
Bitcoin’s losses spilled over into broader crypto markets, and came tracking steep declines in risk-driven markets as sentiment soured in the face of a brewing global trade war. Trump’s so-called reciprocal trade tariffs took effect from Wednesday, drawing ire and threats of retaliation from several major economies.
Bitcoin fell 4.2% to $76,523.5 by 01:41 ET (05:41 GMT), after sinking as low as $74,600. Sentiment towards Bitcoin was also rattled by the crypto forming a death cross- a bearish technical indicator- earlier this week.
The world’s largest cryptocurrency wiped out a brief rebound from recent losses on Tuesday.
Bitcoin close to 6-mth low as trade war fears erode risk
Bitcoin was back in sight of a six-month low hit earlier in the week, as risk appetite was decimated by Trump’s tariffs.
Trump’s tariffs- which include a whopping 104% levy on China- took effect from midnight, eastern standard time, on Wednesday.
The tariffs were unveiled last week and are widely regarded to be much worse than what markets were anticipating. Trump’s 104% duty against China is also far bigger than the 60% duty he had threatened earlier.
China vowed dire retaliation against the U.S., while several other countries in Europe were also seen preparing measures, potentially marking an escalation in a looming global trade war.
Fears of a trade war decimated risk appetite, sparking steep losses across financial markets. Speculative assets such as crypto were no exception, given that they tend to underperform in such uncertain environments.
Recent price gains in gold and the Japanese yen also largely discredited the notion of Bitcoin being an effective anti-risk hedge.
Saylor’s Strategy discloses $5.9 bln unrealized loss
Bitcoin’s extended losses came as major holder Strategy reported a $5.9 billion unrealized loss for the quarter to March 31.
The digital assets loss is expected to result in Strategy clocking a net loss for the first quarter of 2025. The loss comes as a result of changes in Strategy’s accounting standards, which now mandate any changes in the fair value of digital assets be recognized.
Strategy also told shareholders that it had not sold any stock, nor had it acquired any additional Bitcoin since the end of Q1, even as recent declines in Bitcoin’s price presented the potential for bargain buying.
Strategy’s shares fell sharply this week following its disclosure.
Crypto price today: altcoins slide in tandem with Bitcoin
Broader crypto prices fell tracking losses in Bitcoin, as traders remained largely risk-averse.
World no.2 crypto Ether fell 7.4% to a two-year low of $1,459.95, while XRP fell 3.2% to $1.8014 and was near a five-month low.
Solana, Cardano, and Polygon fell between 2% and 3%.
Among meme tokens, Dogecoin fell 3.5%, while $TRUMP shed 3.1% and remained in sight of record lows.
