Cryptocurrencies decline as fears over a sell-off in US equities eclipsed US President Donald Trump’s recent efforts to buttress the industry.
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Bitcoin fell more than 3 per cent on Tuesday morning in Asia, while second-ranked token ether dropped as much as 6 per cent to US$1,756, an intraday low not seen since October 2023, according to data compiled by Bloomberg. Both tokens later pared those losses.
The initial declines came after a sell-off in US equities, led by technology stocks, picked up steam. The tech-heavy Nasdaq 100 Index plunged 3.8 per cent for its worst day since October 2022.
Wall Street is jittery after Trump warned that Americans may feel a “little disturbance” stemming from trade wars with Canada, Mexico and China. Strategists and economists across Wall Street have been raising their odds for a US economic downturn.
“Now that the industry has its strategic bitcoin reserve executive order, crypto has one fewer positive forward catalyst to price in, and we’re left at the mercy of macro risk appetites,” FalconX Global co-head of markets Joshua Lim said.
Trump ordered the creation of a US bitcoin reserve and a separate stockpile of other tokens ahead of a high-profile crypto summit with industry executives in Washington on March 7 – much-touted moves that ultimately did little to lift market sentiment.