It’s one of the few bright spots in a crypto market that has sunk almost 4% in the last 24 hours, undoing early weekend gains. Specifically, rekindled fears over U.S. trade policies — namely, tariffs — caused the market plunge. This drop happened even with the release of positively surprising inflation data—which usually lifts markets.

The decline reflects the general sell-off taking place across traditional financial markets. The Nasdaq 100 was hit the hardest, crashing 6.3% as the larger S&P 500 joined it in a 5.5% dive.

Crypto Market Performance

Bitcoin (BTC) had its sharp gains taken back, hovering about $80,500, still a 2.42% drop over the past 24 hours. That’s after a spike from around $75,000 to over $83,000, propelled by bullish market sentiment from earlier in the week. Ethereum (ETH) reaped even harsher losses, down 6.37% to trade at $1,538. Solana (SOL) followed suit as it too reversed, losing 1.82% of its value, trading at $115.

The total crypto market cap is $1.25 trillion, a 1.88% drop in the past 24 hours. This contributes to the global cryptocurrency market capitalization of $2.56 trillion.

Tariff Impact

The massive increase in tariffs on Chinese imports raised concerns about a general slowdown in global economic growth. Investors are understandably nervous about the possibility of increased trade action directed at Mexico. They think this has the potential to reduce direct corporate profits, particularly in the tech industry.

What happens if the technology sector loses trade war round 1? It depends uniquely on global supply chains and international markets. By all accounts, President Trump’s tariff policies are a major threat to these settled trade flows.

Broader Economic Concerns

The recent sell-off across crypto and traditional markets serve as the latest example of how sensitive investors have become to such negative news related to geopolitics/trade. Further, stronger-than-expected inflation data didn’t do much to calm market fears. This is a sign that the more negative economic outlook news is weighing more heavily than positive news.

These conservative economic concerns are fueled by the expected negative effect that trade wars would have on both economic growth and corporate profitability. Private investors in particular remain on high alert for any indication of a negative turn in trade talks and an escalation.