Bitcoin plunged nearly 10% on Monday (March 3) as fears of an escalating trade war and uncertainty over a potential U.S. cryptocurrency reserve drove investors away from risk.

The world’s largest cryptocurrency dropped 9.47% to $85,321.69 by late Monday, wiping out over a trillion dollars in total market valuation.

By Tuesday (March 4) morning IST, Bitcoin had fallen further to $82464.

Meanwhile, Etherium the second-largest cryptocurrency, slid more than 15%, while XRP, Cardano, and Solana tumbled nearly 20%.

Reason for Crypto currency fall

The recent cryptocurrency crash was driven by a combination of economic and geopolitical factors, including:

Escalating Trade War

• The U.S. imposed new tariffs on imports from Canada and Mexico, triggering fears of retaliatory actions and broader economic instability.
• Investors often react to trade conflicts by pulling out of riskier assets like cryptocurrencies.

Uncertainty Over U.S. Crypto Reserve

• The U.S. government, under President Donald Trump, announced plans for a “Crypto Strategic Reserve” that would include Bitcoin, Ethereum, Solana, Cardano, and XRP.
• Initially, this led to a surge in Bitcoin’s price, but uncertainty over regulatory control, taxation, and market intervention caused panic selling.

Market Sentiment & Panic Selling

• A sudden price drop often triggers automated sell-offs by trading algorithms, worsening the decline
• .Fear of further losses led investors to sell, causing a snowball effect.

Altcoins Hit Harder

Ether, XRP, Cardano, and Solana saw even sharper declines (15–20%) due to their smaller market caps and higher volatility.

Broader Economic Factors

• Concerns over inflation, rising interest rates, and a potential economic slowdown have made investors more cautious about speculative assets.
• Many investors moved funds into safer assets like gold and U.S. Treasury bonds.