TLDR
- Bitcoin plunged below $83K, erasing gains made after Trump’s crypto reserve announcement
- Trump imposed new tariffs (20% on China, 25% on Canada/Mexico), triggering widespread market sell-offs
- About $500 billion was wiped from crypto market value with $1 billion in liquidations
- Major altcoins including XRP, Cardano, and Solana suffered double-digit losses over 24 hours
- Economic uncertainty intensified with GDP forecasts projecting a 2.8% decline in Q1 2025
Bitcoin and the broader cryptocurrency market tumbled sharply as President Trump’s new tariffs took effect, wiping out recent gains from his crypto reserve announcement. The crash saw Bitcoin fall below $83,000 while major altcoins posted double-digit losses.
Bitcoin dropped to $82,618 at its lowest point, marking a 10.5% decline in 24 hours. This erased all gains from Trump’s recent announcement about including Bitcoin in a national cryptocurrency reserve.
BTC Price
The sell-off wasn’t limited to Bitcoin. The total cryptocurrency market lost around $500 billion in value as investors rushed to exit positions. The global crypto market shrank by more than 12% to $2.72 trillion.
Ethereum fell even harder than Bitcoin, dropping 16.5% to around $2,106. XRP, which had previously rallied on news of its potential inclusion in Trump’s crypto reserve, plummeted 18.7%.
Solana and Cardano, two other cryptocurrencies mentioned for the potential reserve, suffered losses of 21.3% and 27.4% respectively. These coins had seen major rallies following Trump’s announcement but quickly gave up those gains.
Trading volume reached $175.84 billion across all cryptocurrencies, with Bitcoin alone accounting for $72.86 billion. Most of this activity represented selling pressure rather than new buying.
The market turmoil triggered a wave of forced liquidations on crypto derivatives platforms. About $1 billion in positions were liquidated, with $867.87 million coming from long positions that had bet on price increases.
Trump’s Tariffs
President Trump’s tariff announcements were the main trigger for the market downturn. On Tuesday, he imposed a 20% duty on Chinese imports and 25% tariffs on goods from Canada and Mexico.
While these tariffs don’t directly affect cryptocurrency, they caused widespread fear in financial markets. Investors moved away from risky assets as concerns about economic growth intensified.
Economic forecasts have been revised sharply downward. The Federal Reserve Bank of Atlanta’s GDPNow model now projects a 2.8% decline in gross domestic product for the first quarter of 2025.
This would mark the fastest economic contraction since COVID-19 lockdowns. Just a month ago, the same model had predicted nearly 4% growth for the quarter.
The cryptocurrency sell-off matched broader moves in traditional financial markets. Stock markets also declined as investors worried about the impact of trade wars on global economic growth.
Trump’s crypto policies have sent mixed signals to markets. While his administration has appointed pro-crypto officials and planned the first White House Crypto Summit for Friday, details about the proposed national crypto reserve remain unclear.
The President did not explain how the reserve would be funded or implemented, creating uncertainty that undermined initial enthusiasm. His own cryptocurrency ventures have also raised questions, as tokens like $TRUMP have crashed in value since their launch.
Meme Coins
Meme coins were among the hardest hit in the market downturn. Dogecoin fell 17.5%, while newer tokens like SNEK, MOG, and AI16Z dropped by 29.29%, 28.24%, and 27.59% respectively.
The crypto market’s reaction shows how external economic factors can quickly override sector-specific news. Despite positive developments like the planned White House Crypto Summit, trade war concerns have dominated market sentiment.
Trading volumes showed a clear pattern of investors exiting positions rather than buying the dip. This suggests market participants remain cautious about near-term prospects given the economic uncertainty.
