The cryptocurrency market took a huge hit this week as Ether (ETH), the second-largest cryptocurrency, experienced one of its worst drops in recent memory. The steep decline followed an unexpected announcement from US President Donald Trump, who revealed new tariffs on Canada, Mexico, and China, while threatening further duties on goods from the European Union. As the news spread, traders across the world rushed to slash their positions, causing a massive selloff in digital assets like Bitcoin (BTC), Ethereum (ETH), and others.
Ether’s Dramatic Drop: A Hard Hit for Investors
In early Asian trading on Monday, Ether saw an eye-watering plunge of up to 27%, dropping to as low as $2,135 per coin. This marked its steepest intraday decline since May 2021, causing panic among investors and traders alike. Although Ether later recovered some of its losses, the sudden drop left many questioning the stability of the crypto market.
Why Did Ether Crash?
The timing of Ether’s massive dip coincided with the latest trade developments under President Trump’s administration. Over the weekend, Trump announced he would impose new tariffs on imports from Canada and Mexico—two major US trading partners. In addition, he warned that the European Union (EU) could also face higher duties soon.
This news rattled traditional markets, and digital assets like Ether didn’t escape unscathed. Many traders view cryptocurrency as a riskier asset, so when uncertainty looms in traditional markets—such as fears of trade wars or a volatile political landscape—they tend to sell off risky assets to safeguard their portfolios.
The trade tensions that followed Trump’s announcement sent shockwaves across the global financial system, and the crypto market, which is often seen as a high-risk play, felt the brunt of it.
Impact on the Broader Crypto Market
Ether wasn’t the only cryptocurrency to take a hit. Bitcoin (BTC), the largest digital asset, also saw a decline of about 10%, falling below the $40,000 mark for the first time in weeks.
Other altcoins, including Solana (SOL), Cardano (ADA), and Avalanche (AVAX), also experienced significant drops as traders moved to the sidelines, avoiding any further exposure to what seemed like a destabilizing global situation.
While digital assets like Ether often fluctuate in price due to market factors such as news, speculation, and regulatory developments, the Trump tariffs introduced a new layer of uncertainty, which amplified the selloff.
What Does This Mean for Crypto Investors?
For cryptocurrency investors, this sharp drop in Ether could raise some serious questions about how much external factors like global trade tensions and government policy can influence the market. Here are some key takeaways from this event:
- Crypto is not immune to global events: While cryptocurrencies are often seen as a decentralized and somewhat independent asset class, they are still very much tied to broader market sentiment. Global events, such as tariff announcements, can send shockwaves through the market, causing significant price swings.
- Risk in volatile times: The crypto market is known for its volatility. The sudden selloff underscores the importance of being prepared for rapid price swings. Investors who aren’t comfortable with this level of risk may want to reconsider their exposure to digital assets during uncertain times.
- Long-term potential remains: While short-term losses are painful, many crypto enthusiasts and investors still see Ether and other cryptocurrencies as a long-term investment. Some argue that digital assets can act as a hedge against inflation and instability, which is why they often bounce back after significant dips.
- Opportunities in the dip?: For those who see crypto as a long-term play, moments like these could represent an opportunity to buy at a discount. As the market calms down, some investors might take advantage of the drop in Ether’s price to increase their positions.
What’s Next for Ether?
The immediate future for Ether and the broader cryptocurrency market depends heavily on how global events unfold. Trade tensions between major economies are likely to continue, and these geopolitical risks could remain a factor in determining the direction of global markets—including the cryptocurrency market.
Some analysts believe that Ether could face additional selling pressure in the short term, especially if Trump moves forward with additional tariffs on European goods, or if other countries retaliate with their own tariffs. However, experts are divided on how much the trade war could continue to affect the crypto market.
For the time being, Ether’s volatility is likely to persist as global markets digest the effects of Trump’s tariffs, and traders adjust their positions accordingly.
How to Navigate These Market Movements
For those already invested in Ether or other cryptocurrencies, it’s important to consider your investment horizon and risk tolerance. Here are some tips for navigating the crypto market during uncertain times:
- Don’t panic sell: While price drops can be alarming, selling in a panic often leads to locking in losses. Instead, assess the situation carefully and focus on your long-term goals.
- Diversify: If you’re heavily invested in one asset like Ether, it might be a good idea to diversify your portfolio to reduce risk. This could involve adding a mix of traditional investments, stocks, or other digital assets.
- Stay informed: Keep an eye on global events and how they might affect the crypto market. If geopolitical risks are increasing, it might be worth scaling back on riskier positions temporarily.
Conclusion
The cryptocurrency market has once again proven its volatility, as Ether fell by 27% following Trump’s tariff announcements. For traders and investors, this serves as a reminder of how quickly external factors like trade wars and political decisions can cause dramatic price swings in the world of digital assets.
For those looking to stay in the game, it’s important to remain level-headed, assess risks, and make informed decisions as the market stabilizes. The road ahead may still be rocky, but Ether’s future is far from decided—many see it as a strong asset in the long term, despite short-term volatility.

I am Aparna Sahu
Investment Specialist and Financial Writer
With 2 years of experience in the financial sector, Aparna brings a wealth of knowledge and insight to Investor Welcome. As an accomplished author and investment specialist, Aparna has a passion for demystifying complex financial concepts and empowering investors with actionable strategies. She has been featured in relevant publications, if any, and is dedicated to providing clear, evidence-based analysis that helps clients make informed investment decisions. Aparna holds a relevant degree or certification and is committed to staying ahead of market trends to deliver the most up-to-date advice.