Cryptocurrencies Ethereum and XRP decline as alternatives prepare for fresh Trump tariffs imposed on EU and Apple goods.
Trade tensions reignite between the U.S. and the EU, casting a shadow on interest in cryptocurrencies, particularly altcoins. President Donald Trump's recent threats of new tariffs against iPhone maker Apple and the EU caused a steep decline in the value of several altcoins on Friday.
According to CoinGecko, Ethereum traded around $2,550, down by 4.1% compared to the previous day. XRP and Dogecoin saw similar losses, standing at $2.35 and $0.23, respectively, while Solana edged down 0.8% to $177.
President Trump said 50% tariffs on goods from the EU would take effect within nine days, posted on Truth Social. He also reportedly suggested Apple would face 25% tariffs on iPhones not manufactured in the U.S., though no indication of the timing has been provided.
The renewed trade tension is likely to adversely affect altcoins because they are riskier than Bitcoin, according to Grayscale's Zach Pandl. "Most altcoins will not benefit from reserve diversification away from the Dollar," he added.
Trump's return to aggressive trade talk sparked a risk-off sentiment, with the market opening in the red on Friday. Gold prices jumped as Treasury yields decreased, while the price of Bitcoin slipped 2.7% to $108,500, retreating from its preceding all-time high of $111,800.
Meme coins were affected most by the news, with the Official Trump token dropping 13% to $13.47 one day after the president hosted a private dinner for top token holders.
Pandl suggested that a resumed trade conflict might actually benefit Bitcoin adoption over the medium term due to increased interest in decentralized systems. However, reduced risk appetite among investors may have a greater impact on valuations.
The implications for altcoins are less direct, but Pandl stated that a renewed trade war could potentially attract more interest in decentralized systems, albeit indirectly.
With the trade conflict set to impact Bitcoin adoption and altcoin prices, investors may find solace in the long-term potential of Bitcoin as a digital safe-haven asset, providing a hedge against monetary manipulation, capital erosion, and instability in traditional markets.
(edited by James Rubin)
- The trade tensions between the U.S. and the EU have caused a steep decline in the value of several altcoins, including Solana, XRP, and Dogecoin.
- According to CoinGecko, Ethereum, another digital asset, is trading around $2,550, marking a 4.1% drop compared to the previous day.
- Grayscale's Zach Pandl suggests that most altcoins are riskier than Bitcoin and will not benefit from reserve diversification away from the Dollar.
- The new trade tension is likely to have a greater impact on altcoin valuations due to reduced risk appetite among investors.
- The renewed trade conflict might actually benefit Bitcoin adoption over the medium term, according to Pandl, due to increased interest in decentralized systems.
- With the trade conflict set to impact Bitcoin adoption and altcoin prices, investors may find solace in the long-term potential of Bitcoin as a digital safe-haven asset, providing a hedge against monetary manipulation, capital erosion, and instability in traditional markets.
