The crypto market is once again in trouble, with major tokens seeing sharp drops. Bitcoin, Ethereum, Solana, and Cardano are among the hardest hit, with some losing up to 28% of their value. This downturn comes as economic uncertainty rises after former U.S. President Donald Trump’s latest tariff announcement.
Bitcoin, the largest cryptocurrency, dropped 8.83% in the last 24 hours, now trading at $83,461.02. Ethereum followed, losing 11.14%, while Solana and Cardano fell 14.53% and 15.97%, respectively. The broader market volume also dipped by 9.70% to $180.01 billion, showing reduced investor confidence.
The latest market crash followed early excitement when Trump suggested creating a U.S. Crypto Strategic Reserve. Prices initially surged as traders welcomed the idea of state-backed crypto holdings. However, doubt quickly set in. Concerns over execution and regulatory approval triggered a wave of sell-offs. Within an hour, $120 million worth of crypto assets were liquidated, adding to the volatility.
Another major reason behind the decline is Trump’s latest decision to impose steep tariffs on imports. He announced a 25% tariff on goods from Mexico and Canada while doubling tariffs on Chinese imports to 20%. In response, China introduced extra tariffs of 10%-15% on certain U.S. imports starting March 10. The fear of a trade war unsettled global markets, leading investors to pull back from volatile assets like cryptocurrencies.
Economic policies often play a crucial role in shaping market sentiment. Tariffs increase the cost of trade, affecting business profitability and consumer prices. When economic conditions become uncertain, investors tend to move their funds toward safer assets, leading to sell-offs in riskier markets like crypto.
Beyond Trump’s policies, several other factors are weighing on the crypto market:
Market Volatility: The crypto space is known for extreme price swings. Large sell-offs often trigger liquidation events, pushing prices down further.
Regulatory Concerns: Inconsistent legal frameworks and potential crackdowns make investors hesitate. The recent global regulatory moves and follows have been a concern in the market.
Liquidity Issues: It has been a little hard to liquidate to date due to little investment interest, meaning movement in price is turning out to be hard to predict.
Investor Sentiment: FUD, or fear, uncertainty, and doubt, is prevailing and triggering panic selling.
Exchange Uncertainties: Traumatic experiences from recent hacking events on exchanges and movements of large holdings.
Bitcoin remains the king of the market but is faltering to keep the momentum. Ethereum is also under pressure, with a daily drop of 14.60%. Other popular tokens like XRP and BNB suffered double-digit losses. New entry Pi Coin showed a 96% dip in the last thirty days, raising a question on its future.
These price changes reflect the nature of the crypto market; it can be very much rattled by global economic and political events. It has all the ingredients of policy shifts, market psychology, and technicals causing the current downturn.
Continuing high uncertainty, with more price fluctuations likely to occur in the short term. Interest in institutional crypto markets is still evident, though institutional investors are keeping tabs on regulatory and economic policies. If trade tensions increase, riskier assets could find themselves under greater pressure to sell.
A majority of people think this market represents a significant opportunity to acquire assets at a low price compared to the previous ones. But as events change, market participants must remain alert for the uncertainties in these times.