The cryptocurrency market took a major hit on Friday after former US President Donald Trump threatened to impose significant new tariffs.
Trump proposed a 50% tax on the European Union, citing stalled trade talks. He also warned Apple against imposing a 25% tax on iPhones not manufactured in the United States.
“I told Tim Cook of Apple a long time ago that I expect their iPhones to be made in the USA,” Trump posted on Truth Social.
Trump described the European Union as "very difficult" and said that talks had yielded no results. He suggested that European tariffs would begin on June 1, but did not specify a timeline for Apple.
📉 Bitcoin price drops below $110,000
Bitcoin (BTC) reacted quickly. After hitting an all-time high of $111,970 on Thursday, it fell below $110,000, losing nearly 2% of its value.
This was followed by other cryptocurrencies:
Ethereum (ETH) value decreased by 3%
XRP and Dogecoin fell by about 3%.
The total market capitalization of cryptocurrencies decreased by 3.5%.
This decline comes after weeks of strong gains. Gold prices rose from $75,000 in early April to more than $111,000 this week.
Analyst's reaction
Nicolai Sondergaard, a research analyst at Nansen, believes the EU's 50% tariff may be more of a negotiating tactic than actual policy.
“This looks like a temporary disruption... but it shows how sensitive risk assets are to political signals,” he told FXStreet.
📉 Stocks are also falling.
The US stock market was also affected by the tremors. It fell 1% after Trump's statement, but later pared its losses, recovering to -0.37% by press time.
⏱️ What next?
Markets are tense. Threats of tariffs are creating uncertainty, especially for technology and cryptocurrency investors. If Trump's plans become policy, expect more volatility ahead.
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