Market Volatility Spikes as Trade War Ceasefire Falters

Cryptocurrencies Fall as Investors Slash Gains from Historic Tariff Pause Rally

Cryptocurrencies tumbled on Friday, with many major coins falling by double digits, as investors took profits and cut their gains from a historic tariff pause rally.

The price of bitcoin, the largest cryptocurrency by market value, fell by as much as 10% to around $63,000, according to Coin Metrics. Ethereum, the second-largest cryptocurrency, fell by as much as 12% to around $4,300.

The selloff came after a remarkable rally in which cryptocurrencies surged by as much as 20% in a single day, fueled by a historic pause in U.S. tariffs on Chinese goods. The pause sparked optimism about a potential trade deal and lifted risk assets across the board.

However, investors began to take profits and cut their gains, leading to a sharp reversal in the cryptocurrency market. The selloff was exacerbated by a lack of buying interest and a surge in selling pressure.

"The tariff pause was a one-day wonder for cryptocurrencies," said Mike McGlone, a strategist at Bloomberg Intelligence. "Investors got ahead of themselves and took profits, leading to a sharp correction."

Other major cryptocurrencies also fell, including Ripple, which fell by as much as 15% to around 75 cents, and Litecoin, which fell by as much as 12% to around $250.

The selloff came as the cryptocurrency market continues to grapple with a lack of institutional investment and a dearth of new buyers. The market has also been impacted by a lack of regulatory clarity, with many investors waiting for clearer guidance before committing to the space.

Despite the correction, many investors remain optimistic about the long-term potential of cryptocurrencies. The market has been driven by a growing interest in decentralized finance, or DeFi, and the potential for cryptocurrencies to play a key role in the future of finance.

"The correction is a natural part of the process," said Alex Krüger, a cryptocurrency analyst. "The market is still in its early stages, and we're seeing a lot of volatility. But the underlying fundamentals are strong, and we're likely to see a continued growth in the space over the long term."