The price of the second-largest cryptocurrency has fallen to $2,500, while Bitcoin has fallen to $91,000

Cryptocurrency traders responded to the tariffs announced by US President Donald Trump by reducing their investment positions in a group of cryptocurrencies.

The price of Ethereum, the world’s second-largest cryptocurrency by market value, fell about 27% to $2,135 on Monday morning in Asia, before paring its losses, according to data compiled by Bloomberg. This is the largest percentage decline in a trading day for the cryptocurrency since May 2021.

Trump’s tariffs are expected to take effect on billions of dollars worth of goods and merchandise imported into the United States from Canada and Mexico, and are expected to disrupt global trade. Trump has also intensified his threats to impose tariffs on the European Union.

“Trump’s tariff war is affecting the entire market,” said Caroline Bowler, CEO of BTC Markets. “Fears that trade wars and stagflation could trigger a recession are spreading to Bitcoin and other cryptocurrencies.” The volatility in the crypto market represents a sharp change from the previous price rally, which was driven by Trump’s pro-industry rhetoric during his campaign and after his election. The Republican president signed an executive order on Jan. 24 to create a working group that is expected to provide clear rules for cryptocurrency companies in the United States within six months. The group is also tasked with evaluating the creation of a national cryptocurrency reserve.