Investing.com-- Bitcoin slumped on Wednesday, mostly wiping out a recent rebound as U.S. President Donald Trump’s steep trade tariffs took effect, sparking widespread losses in financial markets.
Sentiment towards Bitcoin was also spooked by Michael Saylor’s Strategy (NASDAQ:MSTR)- the biggest listed holder of Bitcoin- reporting a $5.91 billion, unrealized loss on its digital asset holdings.
Bitcoin’s losses spilled over into broader crypto markets and came tracking steep declines in risk-driven markets as sentiment soured in the face of a brewing global trade war. Trump’s so-called reciprocal trade tariffs took effect on Wednesday, drawing ire and threats of retaliation from several major economies.
Bitcoin fell 3.5% to $77,128 by 09:49 ET (13:49 GMT) after sinking as low as $74,600. Sentiment towards Bitcoin was also rattled by the crypto forming a death cross- a bearish technical indicator- earlier this week.
The world's largest cryptocurrency wiped out a brief rebound from recent losses on Tuesday.
Bitcoin nears 6-month low as China hits back at Trump’s 104% tariffs
Bitcoin was back in sight of a six-month low hit earlier in the week, as risk appetite was decimated by Trump’s tariffs, to which China swiftly responded.
Trump’s tariffs- which include a whopping 104% levy on China- took effect from midnight, eastern standard time (EST), on Wednesday.
The tariffs were unveiled last week and are widely regarded to be much worse than what markets were anticipating. Trump’s 104% duty against China is also far bigger than the 60% duty he had threatened earlier.
China has hit back at Trump’s latest tariff measures by significantly raising its own import duties on American goods. Starting April 10, tariffs on U.S. imports into China will rise to 84%, up from the current 34%, according to a Wednesday announcement from the Office of the Tariff Commission of the State Council.
Several other countries in Europe were also seen preparing measures, potentially marking an escalation in a looming global trade war.
Fears of a trade war decimated risk appetite, sparking steep losses across financial markets. Speculative assets such as crypto were no exception, given that they tend to underperform in such uncertain environments.
Recent price gains in gold and the Japanese yen also largely discredited the notion of Bitcoin being an effective anti-risk hedge.
However, some market participants see the latest drop as a healthy correction within a longer-term uptrend.
“From a relative value standpoint, Bitcoin remains well above its 2022 bear market low of $16,000. Even with a correction to the $50,000 level, Bitcoin would still reflect over a 200% gain from the low, consistent with a typical bull market correction," Pat Zhang, head of research at WOO X, said to Investing.com.
"Many long-term investors, familiar with the cyclical nature of the market, continue to view pullbacks of under 50% as buying opportunities,” he added.
Saylor’s Strategy discloses $5.9 bln unrealized loss
Bitcoin’s extended losses came as major holder Strategy reported a $5.9 billion unrealized loss for the quarter to March 31.
The digital assets loss is expected to result in Strategy clocking a net loss for the first quarter of 2025. The loss comes as a result of changes in Strategy’s accounting standards, which now mandate any changes in the fair value of digital assets be recognized.
Strategy also told shareholders that it had not sold any stock, nor had it acquired any additional Bitcoin since the end of Q1, even as recent declines in Bitcoin’s price presented the potential for bargain buying.
Strategy’s shares fell sharply this week following its disclosure.
Crypto price today: altcoins slide in tandem with Bitcoin
Broader crypto prices fell Wednesday, tracking losses in Bitcoin as traders remained largely risk-averse.
World no.2 crypto Ether sank 5% to a two-year low of $1,482.80, while XRP fell 6.5% to $1.82 and was near a five-month low.
Solana, Cardano, and Polygon fell between 3% and 8%.
Among meme tokens, Dogecoin dipped 4.4%, while $TRUMP shed 4.2% and remained in sight of record lows.
Ambar Warrick contributed to this report.