The cryptocurrency market has just experienced a sharp decline, particularly in altcoins, after President Donald Trump threatened to impose new tariffs on the European Union (EU) and Apple. This development has caused investors to turn away from risky assets and shift to safe havens like Bitcoin and gold.
Altcoins "in the red", Bitcoin retreats from its peak
On Friday, Ethereum fell 4.1% to $2,550, while [insert coin name] and Dogecoin lost 3.6%, to $2.35 and $0.23, respectively. Solana also slightly decreased by 0.8% to $177.
Bitcoin, while not dropping too deeply, retreated 2.7% to $108,500, moving away from the peak of $111,800 set just a day earlier.
Meme coins are the most heavily impacted group, especially the [insert coin name], which dropped by up to 13% to $13.47, despite having just had a private dinner with major investors the day before.
Main reason: Tariff threats from Trump
Specifically, Trump announced a 50% tax on goods imported from the EU within less than 10 days, while proposing a 25% tax on iPhones made outside the U.S. These statements immediately shifted investor sentiment to a state of concern, leading to a sell-off of altcoins.
Zach Pandl - head of research at Grayscale - believes that:
"Altcoins are at higher risk than Bitcoin amid trade tensions as they are not viewed as safe-haven assets or as tools for diversification away from the USD."
Why could Bitcoin benefit?
Although the price of [insert coin name] has slightly decreased, many analysts believe that the new trade war could boost demand for Bitcoin in the medium term, especially as this asset is increasingly seen as "digital gold."
In fact, gold has risen sharply during the same period, while U.S. Treasury yields have declined - a clear signal that investors are turning to safe assets. At the same time, U.S. stock indices are in the red, reinforcing the view of risk-averse sentiment.
In April and early May, as concerns about tariffs increased, the correlation between Bitcoin and gold rose significantly, indicating that BTC is gradually taking on the role of a financial safe haven similar to precious metals.
Bitcoin's market share increases
According to CoinGecko, Bitcoin currently accounts for over 62% of the total cryptocurrency market value, up from nearly 61% a few weeks ago. This indicates that investors are reducing their altcoin holdings to prioritize Bitcoin, especially during this sensitive period of global policy.
In summary:
Although altcoins are negatively affected by the risk of trade tensions, this could be a long-term opportunity for Bitcoin - an asset seen as a defensive shield against global political and economic volatility. In a high-risk environment, the safe choice is gradually leaning towards Bitcoin instead of smaller altcoins.
Risk warning: This article is not investment advice. The cryptocurrency market is highly volatile and may not be suitable for all investors. Please consider carefully and take responsibility for all financial decisions.