President Trump's decision to move ahead with his tariffs has had a significant impact on the crypto market, affecting major cryptocurrencies such as Bitcoin and Ethereum.
President Donald Trump's statements regarding his tariff policy have caused an earthquake in the crypto market. In the last few hours, the prices of major cryptocurrencies, such as Bitcoin and Ethereum, have experienced a notable drop, reflecting the growing uncertainty among investors.
BUY BITCOINBitcoin, which was trading above $90.000 until recently, has fallen below this barrier for the first time in three months, while Ethereum has dropped to $2.400 per unit. The crypto market as a whole has lost around 10% of its market capitalization, according to data from CoinMarketCap.
Source: CoinMarketCap
Trump has insisted on the Tariffs planned against Mexico and Canada, which has heightened investor fears about the global economic impact. Cryptocurrencies, traditionally seen as risky assets, have been particularly hard hit as investors seek refuge in safer assets.
Currently, the Cryptocurrency Fear and Greed Index shows a score of 21, indicating extreme fear in the market. However, some analysts remain cautiously optimistic, arguing that once conditions stabilize, cryptocurrencies could resume their bullish trajectory.
The direct impact of tariffs on the crypto market
The tariffs announced by Trump have created a climate of uncertainty that has been directly reflected in the performance of cryptocurrencies. Bitcoin, considered by many to be a safe haven asset, has lost ground, falling below $89.000 at the time of writing this article. Ethereum, meanwhile, has seen its price plummet to $2.400, which represents a significant decrease of more than 20% compared to its recent highs.
Source: CoinMarketCap
Falling prices are not the only indicator of concern in the market. The total market capitalization of the crypto sector has declined by close to 10%, suggesting a general loss of confidence. Investors, especially retail investors, have chosen to liquidate their positions, which has aggravated the downward pressure. According to data from Coinglass, Liquidations in the crypto market have exceeded $ 1.000 million dollars in the last 24 hours, a number that reflects the intensity of the sale.
BUY ETHEREUMExperts attribute this volatility to the perception that tariffs could trigger a global economic crisis. Nexo’s Kristian Haralampiev noted that “trade tensions and the imposition of tariffs can increase inflation and reduce liquidity,” directly affecting risk assets like cryptocurrencies. Furthermore, the growing correlation between cryptocurrencies and traditional markets has exacerbated the decline as investors look to reduce their risk exposure.
Investors' perception of the crypto market crash
Investors’ perception of risk assets has played a pivotal role in the crypto market’s downfall. Cryptocurrencies, which are already inherently volatile, have been particularly sensitive to changes in market sentiment. Confirmation of the tariffs has heightened fears about a potential economic stagnation, leading investors to adopt a defensive stance.
The Cryptocurrency Fear and Greed Index, a widely used indicator for measuring market sentiment, is currently at a score of 21, the indicating "extreme fear"This data reflects the lack of confidence among investors and their tendency to sell before losses deepen. However, some experts believe that this level of fear could be an indication that the market is close to a possible change of trend, especially if uncertainty dissipates.
Source: alternatively
Furthermore, the growing correlation between cryptocurrencies and traditional markets has increased the pressure on prices. Institutional investors, who had shown increasing interest in cryptocurrencies in recent months, seem to be adopting a more cautious stance, which has reduced the flow of capital into the sector, as indicated by the weekly report Coinshares' report on capital flows into crypto-asset-based investment funds.
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Experts' outlook points to a possible recovery
Although the current situation seems challenging, many experts believe that cryptocurrencies could recover once economic conditions stabilize. Bitcoin, in particular, has demonstrated in the past its ability to withstand and strengthen in the face of economic and political crises.In fact, some analysts argue that Trump's tariffs could become a catalyst for investors to seek alternative assets, such as cryptocurrencies, that do not rely on traditional financial systems.
Haralampiev noted that while tariffs are creating volatility in the short term, they could create opportunities for Bitcoin and other cryptocurrencies in the long term. He noted that the decentralized nature of these digital currencies makes them an attractive alternative for investors looking to hedge against inflation and the devaluation of fiat currencies.
However, for this recovery to occur, investors will need to regain confidence in the market. This will largely depend on the evolution of economic policies and the ability of the crypto sector to demonstrate its resilience in the face of external challenges.
PREPARE YOUR WALLETOther events that have negatively impacted the crypto market
In addition to Trump’s tariffs, other recent events have contributed to the crypto market’s downfall. These include the Federal Reserve’s (Fed) tightening of monetary policy, the fall of the LIBRA token, the Bybit hack, and FTX refunds.
La Fed monetary policy has been a key factor in the volatility of the crypto market, generating confusion among investors and intensifying uncertainty.
Furthermore, the Libra token crash, initially promoted by Javier Milei, the president of Argentina, has generated a negative impact on the market. LIBRA, which was seen as an innovative project, has lost almost all its value since its launch, eroding investor confidence.
Also, the Bybit hack, one of the main cryptocurrency exchange platforms, has also had a significant impact on the market. Attackers managed to steal more than $1.400 billion in cryptocurrencies, mainly Ethereum (ETH), which has generated a climate of insecurity among users and investors. Finally, the FTX Refunds have added more uncertainty to the market.
INVITE AND WINIn short, crypto investors are facing a highly uncertain environment, adopting a defensive attitude that has intensified the bearish pressure on the crypto market. However, experts remain optimistic, arguing that cryptocurrencies could recover once political and economic conditions stabilize.
Investing in cryptoassets is not fully regulated, may not be suitable for retail investors due to high volatility and there is a risk of losing all invested amounts.
