The Bitcoin and top altcoins crashed on Friday as trade tensions rose in the United States and profit-taking ensued. The BTC price plunged to $107,000, while XRP fell by 5% to $2.29.
Other top altcoins like Shiba Inu, Dogecoin, and Cardano declined by over 5% in value in the last 24 hours. Dogecoin fell to $0.2247, Cardano to $0.7457, and Shiba Inu to $0.00001427.
Why BTC and Top Altcoins Are Crashing
The main reason for the Bitcoin and altcoins crash was that trade tensions resumed on Friday. In a post on TruthSocial, Trump has said that the US would levy a 50% tariff on all goods from the European Union, its biggest trade partner.
The two sides, which do trade worth over a trillion dollars a year, have been in discussions on how to end tensions. While the EU has offered a zero-for-zero tariff, the Trump team has accused the region of more trade barriers, corporate penalties, and value added taxes. The EU has also threatened to retaliate against the US by levying significant tariffs, including on Boeing jets.
Besides Europe, the US has failed to reach agreements with Japan and South Korea, despite weeks of negotiations. It has only reached a deal with the UK and China.
Bitcoin and altcoins also crashed due to profit-taking after Bitcoin surged to a record high. It is common for Bitcoin and other assets to pull back after a strong rally as some investors take profits voluntarily, or when take-profits are triggered.
Read more: MSTR Stock Forecast: Will Strategy Shares Hit ATH Like Bitcoin?
What Next for Bitcoin and Altcoins?
On the positive side, the escalation between the US and EU could be the calm before the storm, as we saw with China. It is part of Trump’s “art of the deal.” This is where he escalates situations and then de-escalates after negotiations.
With China, he boosted tariffs to 145%, in what he and other officials said was an embargo. China then retaliated with a 125% tariff. Yet, despite all the talk, China was the second country it reached a deal with.
The other positive thing is that Bitcoin has become a safe haven in times of heightened risks. BTC did better than stocks after his Liberation Day speech in April. This occurred due to increasing Bitcoin demand, reflected in rising ETF inflows and decreasing exchange supply.
Therefore, Bitcoin and other altcoins like Shiba Inu, Cardano, XRP, and Dogecoin will likely resume their uptrend in the coming days.
Read more: BlackRock’s IBIT ETF Assets Hit $70 Billion as Gold’s GLD Outflows Surge
