Investing.com-- Bitcoin edged lower on Tuesday, extending overnight declines as risk appetite was quashed by growing uncertainty over U.S. trade tariffs, as well as the impact of a sweeping tax and spending cut bill backed by President Donald Trump.
The world’s largest cryptocurrency was also subject to some profit-taking after vastly outpacing broader crypto markets in June. Bitcoin lost 0.8% to $106,670 by 09:11 ET (13:11 GMT).
Bitcoin took little support from major corporate holders Strategy, formerly MicroStrategy (NASDAQ: MSTR ), and Metaplanet Inc (TYO: 3350 ), announcing more acquisitions of crypto this week. Strategy purchased over $500 million worth of coins, while Metaplanet added $108 million of Bitcoin.
Crypto markets largely lagged strength in other risk-driven markets, specifically equities, as gains in technology shares saw Wall Street notch record highs in recent sessions.
Trump trade tariffs, tax bill passage in focus
Markets were grappling with two main points of uncertainty– Trump’s plans for trade tariffs, ahead of a July 9 deadline for agreements, and the passage of a controversial tax and spending cut bill in the Senate.
On the trade front, the U.S. and Canada were expected to resume talks after Ottawa seemingly acquiesced to Trump by removing a major digital sales tax on U.S. firms.
But relations with Japan appeared strained after Trump lashed out against the country for allegedly not buying U.S. rice imports. Trump also threatened to end trade negotiations with Tokyo.
Major global economies have until July 9 to reach a trade deal with the U.S., failing which they will be slapped with steep U.S. tariffs ranging from 20% to as high as 50%.
On the fiscal front, U.S. Senators were seen embarking on a marathon vote session to debate and eventually vote on Trump’s “big beautiful bill” act, amid heightened concerns over its fiscal impact.
A non-partisan analysis showed the bill will add $3.3 trillion to U.S. debt in the next decade if it passes in its current form. This comes with U.S. debt already at a record-high $36 trillion.
Markets fear that the bill could further increase the U.S. fiscal deficit and increase the risk of a government default, especially if the spending cap is not raised later this year.
While trade and fiscal concerns do not directly affect crypto markets, they are largely vulnerable to shifts in market sentiment, due to their speculative nature.
ARK trims Coinbase stake after record rally
Cathie Wood’s ARK Invest sold nearly $43.8 million worth of Coinbase (NASDAQ: COIN ) shares on Monday, continuing a series of recent disposals.
Over the past three trading sessions, the firm has offloaded a total of 270,984 shares, valued at just under $95 million based on Monday’s closing price of $350.49.
Coinbase stock recently climbed to an all-time high above $380 on June 26, prompting the sales.
Altcoins see little relief after weak June
Broader crypto prices moved in a flat-to-low range, seeing limited relief after logging steep losses in June. Barring Bitcoin, crypto prices largely retreated in the prior month.
World no.2 crypto Ether fell nearly 1% to $2,442.30, while XRP rose 1% to $2.19.
Solana slid 1.3%, while Cardano lost 1.5%, extending its sharp June declines.
Among memecoins, Dogecoin and $TRUMP dipped more than 2% each.
(Ambar Warrick contributed to this report.)