Since the election of Donald Trump as president, the virtual asset market, which had been soaring, has been experiencing sharp declines for several days. In particular, as President Trump confirmed the imposition of tariffs on Canada, Mexico, and China, the likelihood of an escalation in the trade war increased, leading to a drop in Bitcoin, which had been praised as 'digital gold,' falling below $100,000, while international gold prices recorded an all-time high.
As of 3 p.m. on 3rd, according to global virtual asset market site CoinMarketCap, major virtual assets, including Bitcoin, have recorded significant drops. Bitcoin, which recently approached $110,000 with the help of President Trump's inauguration, has fallen 6.07% from the previous day and nearly 7% over the week, trading around $93,000. This marks the first time Bitcoin has retreated to the $93,000 level since 13th of last month.
The decline in altcoins (virtual assets excluding Bitcoin) was even greater. Ethereum and Ripple fell by 19.69% and 22.81%, respectively, compared to the previous day. Solana, which had recently gained attention as a Trump meme coin (speculative virtual asset with no intrinsic value), also dropped more than 7%, while Dogecoin, the leading meme coin, fell nearly 24%. Additionally, over 90% of altcoins within the top 100 by market capitalization, excluding stablecoins that maintain value, showed double-digit declines.
In contrast, gold, considered a typical safe asset amidst an unstable international situation, is nearing an unprecedented $2,800 per ounce. On 31st of last month, international gold prices closed at $2,794.55 per ounce. Gold prices have now risen for five consecutive weeks and have increased by about 7% over the past month.
The decline in major virtual assets and investors' preference for gold have increased due to President Trump's tariff threats, escalating the possibility of a trade war. On 1st of this month, President Trump made a final decision to impose a 25% tariff on Canada and Mexico and a 10% additional tariff on China, and subsequently declared he would impose tariffs on the European Union (EU) as well. Canada has announced it will impose a 25% tariff on U.S. products as an immediate retaliation.
Recently, Bitcoin has gained such popularity that it surpassed silver in terms of market capitalization, being recognized as the 8th largest asset in the world. As a result, there were expectations for Bitcoin to function as digital gold. Its nickname stems from its perceived scarcity and similarities to gold in terms of storage and convenience. However, given its recent volatile prices amid external uncertainties, it is clear that it is not fulfilling the most important feature of gold as a safe asset.
Among investors, comments from prominent figures suggesting that Bitcoin's value is overinflated have become a hot topic. Eugene Fama, a Nobel laureate and known as the father of modern finance, pointed out during a podcast appearance on 30th of last month that Bitcoin cannot serve as a currency, asserting that "the probability of Bitcoin's value reaching 0 within 10 years is nearly 100%." Bill Gates, co-founder of Microsoft, also recently evaluated cryptocurrencies as "completely useless" in an interview with The New York Times.
However, some argue that Bitcoin's intrinsic value remains high, despite a temporary plunge due to tariffs. Robert Kiyosaki, author of the bestselling financial book 'Rich Dad Poor Dad,' noted on X (formerly Twitter) that due to Trump's tariffs, "gold, silver, and Bitcoin could fall," adding that it presents a buying opportunity. Jeff Park, chief strategist at a U.S. asset management firm, also stated that "the tariff war triggered by Trump will increase Bitcoin prices in the long term."