Crypto Market Declines 25% Amid Recession Concerns and Trade War Fears
The crypto market is experiencing a downturn this week due to concerns over a potential trade war and disappointment regarding the US government's crypto reserve plans. President Donald Trump's recent hints at a possible recession have unsettled investors.
Market Trends
- Bitcoin has dropped nearly 4% in the last 24 hours, approaching $79,000, a level not seen since mid-November.
- Ethereum has declined by 10%, reaching $1,860, its lowest since August.
- XRP fell by 4%, Solana by 7%, and Cardano by 8% as investors retreat from riskier assets.
The downturn coincides with aggressive tariff policies from the Trump administration, raising fears of a trade war that could exacerbate inflation and increase import costs. Investors are shifting towards safer investments amid these uncertainties.
Government Crypto Reserve Plans
- Disappointment arose when the White House stated it would not make additional crypto purchases, retaining only cryptocurrencies seized from illegal activities.
- Haider Rafique of OKX noted that while establishing a Bitcoin reserve is significant, it does not create immediate buying pressure.
The overall decline in the crypto market also reflects a reduced risk appetite following the Federal Reserve's announcement of fewer anticipated interest rate cuts for 2025. Since December, the market cap has decreased by approximately 25%.
