Investing.com-- Bitcoin slid on Tuesday, extending losses from the prior session as a short-lived rally, on hype over U.S. President Donald Trump’s plans for a cryptocurrency reserve, largely ran out of steam.
Risk appetite was also rattled by Trump imposing steep tariffs on China, Canada, and Mexico from Tuesday, escalating a global trade war.
Bitcoin tumbled back in sight of a four-month low, while major altcoins also clocked heavy losses, largely reversing all gains made on Trump’s reserve comments.
The world’s largest cryptocurrency slid 10.1% to $83,950.0 by 00:04 ET (05:04 GMT).
Bitcoin slumps as Trump reserve boost proves fleeting
Bitcoin and broader crypto markets had risen sharply on early-Monday after Trump outlined five cryptos, including Bitcoin and Ether, which will be included in a national crypto reserve.
But Trump did not clarify just how this reserve will be formed, and how his administration will fund purchases of crypto. While the 47th president has signed executive orders to explore a regulatory framework for crypto, little is known about what this framework will entail.
Uncertainty over Trump’s crypto policies largely soured enthusiasm around his promises of a reserve.
Trump’s decisions to launch cryptos themed around him and his family have also garnered mixed reactions, given that the cryptos have largely crashed in value. His $TRUMP meme token is trading at a fraction of its post-launch peak a month ago.
Still, Trump is set to host the first White House Crypto Summit on Friday, and could offer up more cues on regulation then. The U.S. President also named a host of pro-crypto appointees for key regulatory positions.
Tariff jitters dent risk appetite
Crypto prices have been on a prolonged losing streak since mid-February, amid increasing anxiety over Trump’s tariff plans. The U.S. President on Tuesday imposed a 20% duty on China and 25% tariffs on Canada and Mexico.
While the tariffs have no direct impact on crypto markets, they severely undermined risk appetite among investors, keeping them averse towards speculative assets. Broader global financial markets also retreated, while safe havens such as the Japanese yen and gold saw buying.
Investors feared that an escalating trade war will undermine global economic growth, especially when several major economies are still struggling with high inflation.
Crypto price today: altcoins slump as Trump boost fades
Broader crypto prices largely retreated on Tuesday, wiping out all of their gains made on Trump’s reserve announcement.
World no.2 crypto Ether slid 14% to $2,106.28, while XRP slumped 16.1% to $2.3597.
Solana and Cardano, which were the other two cryptos mentioned by Trump for the reserve, slid 18.9% and 22.7%, respectively. Polygon lost 15.5%.
Among meme tokens, Dogecoin fell 15.2%, while $TRUMP plummeted 22.8%, coming back in sight of record lows.