Cryptocurrency prices took a hit on Monday, as bitcoin dropped to a three-week low amidst concerns over a potential trade war. Bitcoin, the largest cryptocurrency, fell to $91,441.89 before recovering to $95,730.35, marking a 6.2% decrease. Ether, another prominent cryptocurrency, experienced a substantial 25% decline since Friday, its largest three-day loss since November 2022, now priced at $2,592.14.

The market turbulence was triggered by U.S. President Donald Trump’s decision to impose tariffs on Mexican, Canadian, and Chinese imports, prompting retaliatory measures from the affected countries. This geopolitical tension has led to a broader selloff across financial markets, with nearly a quarter of the top 100 cryptocurrencies losing over 20% in value within a day.

Investors are closely monitoring the impact of tariffs on economic growth and inflation, fueling uncertainty and volatility in the cryptocurrency market. Trump’s own cryptocurrency, $TRUMP, plummeted below $20 after surging to highs above $73 earlier.

Despite the disappointment among some investors over the lack of immediate pro-crypto actions from the Trump administration, there is optimism for long-term growth in the sector. Trump’s initial embrace of digital assets during his campaign had raised hopes for favorable regulations, but the market is now waiting to see how these promises materialize.

While short-term volatility persists, the overall outlook for cryptocurrency remains positive, driven by expectations of continued organic growth under a potentially more crypto-friendly U.S. administration. As the market navigates through uncertainties, the resilience of cryptocurrencies like bitcoin as a risk-off asset is being closely observed.