Cryptocurrency markets have experienced notable fluctuations recently, influenced by the economic and trade policies pursued by U.S. President Donald Trump. These policies, described as reckless by many analysts, had direct effects on the cryptocurrency market.
The impact of tariffs on the cryptocurrency market:
On April 3, 2025, President Trump announced plans to impose new tariffs, raising fears of escalating trade wars. This announcement prompted investors to steer away from high-risk assets, including cryptocurrencies. As a result, the price of Bitcoin dropped to below $82,000, marking its worst performance in the first quarter since 2018.
The impact was not limited to Bitcoin alone, but extended to include other cryptocurrencies. Smaller cryptocurrencies such as Ethereum (ETH), Solana (SOL), and Cardano (ADA) experienced relatively larger declines. For example, Ethereum fell by 10.4%, and Solana by 16.3%, reflecting an increasing caution from investors towards digital assets with lower market capitalization.
The launch of a stablecoin and the ensuing controversy:
In another controversial move, President Trump, in collaboration with 'World Liberty Financial,' managed by his sons, launched a stablecoin called 'USD1.' This currency is centrally managed by the company, enabling it to freeze accounts and block transactions, which contradicts the decentralized principles underlying cryptocurrencies like Bitcoin. This move raised concerns about the potential use of this currency to enhance central control and reduce individuals' financial freedom.
Political and economic reactions:
Trump's trade policies faced sharp criticism from members of the U.S. Congress, who described them as 'reckless' and leading to price increases that harm the economy. For example, Congressman Josh Gottheimer expressed concern that tariffs would result in the largest tax increase on American families in a generation, increasing the financial burden on families and businesses.
Conclusion:
These developments reflect the profound impact of economic and trade policies on cryptocurrency markets. These events highlight the need for cautious investment strategies and close monitoring of political and economic developments, given the high volatility these markets experience.
