Market commentary
The uncertainty surrounding Trump's tariff policy has unsettled global markets over the past few weeks. Bitcoin was not spared from this risk-off phase. The price of the largest cryptocurrency fell more than 30% from its all-time high, which was reached shortly before the Republican took office. However, the situation is gradually calming down. Both the stock markets and the Bitcoin price have begun to recover.
Markets hate uncertainty
The tariffs announced by President Trump, including a 10% base tariff on all imports and volatile rates for regions such as China, Europe, and Japan, were characterized by a lack of transparency. In addition, statements about the possible dismissal of Fed Chairman Jerome Powell shook confidence. Markets hate this uncertainty because it makes it difficult for investors to plan for future results and value assets. This leads to volatility and a short-term sell-off in most asset classes.
Following the strongly negative market reactions, Trump is now softening his stance. The administration announced a significant reduction in tariffs on China, no plans to dismiss Powell, and a potential lifting of the debt ceiling. Since hitting its low, the price of Bitcoin has risen by +21% and is trading above USD 90,000 again.
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Altcoins follow the digital gold
Amid uncertain conditions, alternative cryptocurrencies (“altcoins”) tend to suffer disproportionately due to their illiquidity. The market capitalization of the entire crypto market plummeted from USD 3.75 trillion below its previous all-time high in 2021 to USD 2.3 trillion (-37%). The overall market recovered in line with Bitcoin, rising by +22%.
Price gains over the last seven days have been rather subdued. Bitcoin led the way with +8.97%, while a few outliers posted double-digit percentage gains. The winners of the week were Sui (+42.59%), Chainlink LINK (+14.33%) and Avalanche AVAX (+13.23%). Unus Sed Leo LEO (-1.73%) and Tron TRX (-0.84%) were the only ones in the top 20 to remain in the red.
Disclaimer
All information in this publication is provided for general information purposes only. The information provided in this publication does not constitute investment advice and is not intended as such. This publication does not constitute and is not intended as an offer, recommendation or solicitation to invest in any financial instrument, including cryptocurrencies and the like. The contents contained in the publication represent the personal opinions of the respective authors and are not suitable or intended as a basis for decision-making.
Risk notice
Investing in cryptocurrencies, is fundamentally associated with risk. The total loss of the invested capital cannot be excluded. Cryptocurrencies are very volatile and can therefore be exposed to extreme price fluctuations in a short period of time.
