15.02.2025 15:33
The cryptocurrency industry recently basked in the apparent pro-crypto stance emerging from US regulators, fueled by the President's own memecoin, the SEC's promise of reduced enforcement, and the White House's executive order aiming for regulatory clarity. This positive sentiment, further bolstered by the SEC's implementation of SAB 122 under the Trump administration—a move widely seen as promoting crypto adoption—and the global push for Bitcoin reserves, appeared unshakeable. However, a recent week delivered a stark reality check, exposing the cryptocurrency market's heightened vulnerability to macroeconomic forces.
A dramatic market downturn, coinciding with President Trump's announcement of tariffs on China, Canada, and Mexico, underscored this vulnerability. Coinglass data revealed a $2 billion loss in the crypto market on that single day; however, some experts claim initial liquidations far exceeded this figure, potentially reaching over $10 billion – surpassing even the losses seen during the FTX collapse. This sharp decline, according to a Nansen report, may have been partly attributed to market behavior often described as "buy the rumor, sell the news." A temporary reprieve has been granted, with Trump postponing tariffs on Canada and Mexico for a month, but the looming threat remains.
The potential implementation of these tariffs carries significant risks, potentially exacerbating the possibility of a recession. These tariffs, essentially taxes on imported goods, aim to protect domestic industries by increasing the cost of foreign products. This protectionist approach, however, has significant downsides. Increased prices stemming from tariffs inevitably lead to decreased consumer spending, a key driver of economic growth. The ripple effect of reduced consumer spending could significantly contribute to economic contraction, further destabilizing already fragile markets, including the cryptocurrency sector. The interconnected nature of global economics and the crypto market is increasingly apparent, leaving the future trajectory of cryptocurrency prices intricately linked to broader macroeconomic trends.
