On Thursday, cryptocurrency prices and related stocks fell sharply after U.S. President Donald Trump announced new tax-on-telecom-services/">tax/">tax-on-telecom-services/">tax-on-telecom/">tax-on-telecom-services/">tax/">tax-on-telecom-services/">tax-in-2024/">tax-on-telecom-services/">tax/">tax-on-telecom-services/">tax-on-telecom/">tax-on-telecom-services/">tax/">tax-on-telecom-services/">taxes on imports, sparking concern in global markets.
Fearing a potential trade war, investors sold off risky assets, including Bitcoin and tech stocks.
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Major declines across the crypto market
Coinbase, a popular crypto exchange, dropped nearly eight percent, while MicroStrategy, a big Bitcoin investor, fell over five percent. Bitcoin mining companies like Marathon Digital and Riot Platforms also saw losses between five percent and nine percent. Bitcoin itself fell almost four percent, and Ethereum dropped more than five percent.
Experts say the drop shows that crypto is now reacting more to big economic changes. "Crypto moves with global markets, just like stocks," said David Hernandez from 21Shares. "When investors get nervous, they sell risky assets like Bitcoin."
Despite the drop, some believe crypto could recover faster than stocks. "Bitcoin is still holding strong at key price levels," Hernandez added. Others think trade wars might actually help crypto in the long run.
"Higher tax-on-telecom-services/">tax/">tax-on-telecom-services/">tax-on-telecom/">tax-on-telecom-services/">tax/">tax-on-telecom-services/">tax-in-2024/">tax-on-telecom-services/">tax/">tax-on-telecom-services/">tax-on-telecom/">tax-on-telecom-services/">tax/">tax-on-telecom-services/">taxes on trade could weaken the U.S. dollar," said Marcin Kazmierczak of RedStone. "If people lose trust in traditional money, they may turn to Bitcoin as an alternative."
For now, markets remain shaky. But if things calm down, crypto could see a quick rebound as investors look for bargains.
Read also: Trump pledges to make U.S. the world’s crypto capital
Key facts about the stock market
The stock market is where investors buy and sell publicly traded company shares. It plays a key role in the economy, allowing businesses to raise capital and individuals to invest for potential profit.
Stock prices change based on company performance, economic conditions, and investor sentiment. Major markets include the New York Stock Exchange (NYSE) and Nasdaq. Factors like interest rates, inflation, and global events can impact stock movements.
While investing in stocks offers growth opportunities, it also carries risks. Many investors diversify their portfolios to manage risk and maximise returns over time.
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