Bitcoin has sharply declined, erasing most of the recent recovery as President Donald Trump's steep trade tariffs came into effect, leading to widespread losses in financial markets.

Sentiment towards Bitcoin was also affected by the announcement from MicroStrategy (NASDAQ:MSTR) - the largest publicly traded holder of Bitcoin - of an unrealized loss of $5.91 billion on its digital asset holdings.

Bitcoin's losses extended to the broader cryptocurrency markets, following sharp declines in risk-driven markets as sentiment worsened in the face of an impending global trade war. Trump's reciprocal tariffs came into effect on Wednesday, provoking anger and threats of retaliation from several major economies.

Bitcoin fell by 4.2% to $76,523.5 by 09:41 AM Saudi time, after dropping to a low of $74,600. Sentiment towards Bitcoin was also influenced by the cryptocurrency forming a death cross - a bearish technical indicator - earlier this week.