The crypto market shed $180 million in the last 24 hours, a 6% decline in its total value to $2.75 trillion, as investors reacted to US President Donald Trump’s sweeping global tariffs.
Unveiled on Wednesday, which Trump dubbed “Liberation Day,” the tariffs imposed fresh levies on everything from Chinese goods to European industries and threaten to cause deep fractures in global trade, market analysts say.
Crucially for the crypto industry, the tariffs could disrupt miners, blockchain developers, and the global liquidity supply for the market.
Still, market observers say they are optimistic about crypto’s long-term prospects.
“The outcome for crypto will be positive ― Bitcoin prices will rocket in the long term, as institutional investors move capital away from increasingly unstable US-led institutions,” Zach Burks, CEO of NFT platform Mintology, told DL News.
That’s the long-term play, but in the short-term, market watchers say there is more pain ahead.
Risk-off sentiment is in play, which means traders are less incentivised to bet on more volatile assets like cryptocurrencies and tech stocks.
The tech-heavy Nasdaq 100 is down 3.7% over the past 24 hours.
However, Mateusz Kara, CEO of crypto payment platform Ari10 said investors shouldn’t worry about tariffs.
“Markets were waiting for certainty [and] now they have it,” Kara said. “The real danger was the unknown, not the tariffs themselves.”
As investors recalibrate risk, they may increasingly ditch high-volatility assets in favour of safer bets such as US bonds and dollar holdings.
But the tariffs that drive this strategy might also cause a problem down the road, according to Arthur Hayes, the recently pardoned founder of BitMEX and chief investment officer at Maelstrom.
Hayes said Trump’s tariffs were aimed at curbing trade imbalances.
“The impact for Treasuries is that without dollar exports, foreigners can’t buy bonds,” Hayes posted on X while adding that the Federal Reserve would have to act as the liquidity provider of last resort.
Hayes previously predicted that a Fed pivot to quantitative easing would fuel Bitcoin’s price surge to $250,000 this year.
Analysts at Swiss investment bank UBS say they expect the Fed to deliver 75 to 100 basis points of interest rate cuts in the remainder of the year.
Interest rate cuts signal the loosening of monetary policy and tend to favour assets like Bitcoin and technology stocks.
Crypto market movers
- Bitcoin is down 4.2% over the past 24 hours to trade at $81,917.
- Ethereum is down 5.7% over the same period to about $1,772.
What we’re reading
- Why a crypto nonprofit with $65m wants to buy the DNA data of 15 million people ― DL News
- Top 5 revenue generating apps — Milk Road
- How a Radical Proposal in Trump’s World Could Hurt Stablecoins, but Boost Bitcoin ― Unchained
- Democrats pounce on Trump’s crypto ventures during marathon stablecoin hearing ― DL News
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please contact him at osato@dlnews.com.
