- Bitcoin and Ether fell in tandem with notable declines in the U.S. stock market.
- Trump’s Bitcoin reserve failed to meet expectations impacting the crypto market.
- Market uncertainty and trade concerns worsened the situation for digital assets.
Bitcoin and Ethereum have dipped considerably in value as fears over a decline in U.S. stocks overshadow President Donald Trump’s recent support of the industry. According to CoinMarketCap, on early Tuesday Bitcoin fell over 3%, while Ether dropped around 6% to an intraday low of $1,756, its lowest since October 2023. Although both assets recovered slightly later, digital assets remain under scrutiny.
BTC also suffered a 4.2% decline on Monday, settling around $79,500, marking a 12% drop over the past few days. Similarly, Ether saw a 3% decrease, trading at $1,900. This plunge coincided with a selloff in U.S. equities in U.S. equities, with indices like the S&P 500 and Nasdaq Composite falling by 2.7% and 4%, respectively. This downturn reflects market uncertainty, with Trump’s comments on potential recession risks and tariffs adding to the volatility.
Market Turbulence Fueled by Economic and Trade Concerns
The general economic concerns surrounding President Trump’s remarks have heightened market volatility. Amid ongoing trade tensions with China, Canada, and Mexico, Trump warned that Americans would face a ‘little disturbance’ due to these disputes. As a result, Wall Street has grown more concerned about a probable recession. Many economists have revised their predictions, warning of a potential U.S. recession.
Hayden Hughes, head of crypto investments at Evergreen Growth, argued that the market’s reaction was exaggerated. Joshua Lim, Co-Head of Markets at FalconX, agreed, noting that crypto markets are now heavily influenced by macroeconomic risk appetites, especially following the Bitcoin reserve executive order.
Related: Will Bitcoin Be A Safe Haven in The Trade War Recession?
Trump’s Bitcoin Reserve: A Missed Opportunity for Crypto Investors
Earlier this month, Trump’s announcement of the U.S. Bitcoin reserve aimed to solidify America’s position as the “Crypto Capital of the World.” However, the executive order issued on Thursday has not met expectations. The reserve will consist mainly of Bitcoin seized from civil and criminal asset forfeitures, rather than newly purchased Bitcoin. The order grants the Treasury and Commerce departments permission to develop “budget-neutral strategies” for the reserve, leaving the future of government-backed cryptocurrency uncertain.
While some had hoped the reserve would involve the government purchasing more Bitcoin, these expectations remain unfulfilled. Despite a high-profile meeting between Trump and crypto leaders in Washington on March 7, the market remained unimpressed. With no substantial government action in purchasing Bitcoin for the reserve, investors are now questioning the executive order’s impact on the broader crypto ecosystem.
