Bitcoin and Other Cryptos Slip on Risk-Averse Vibes

The golden age of crypto is off to a rocky start.

The price of bitcoin plummeted to a three-month low yesterday, falling from more than $95,000 to nearly $86,000. Other cryptocurrencies slipped in bitcoin’s wake, including ether and solana. Memecoins tumbled the furthest, dropping more than 15% yesterday per Coingecko, as cautious investors piled into Treasurys and pulled out of slightly less assured assets like fartcoin.

The main culprit: Risk-on investments are being hit hard by macroeconomic concerns after President Donald Trump on Monday doubled down on his plans to impose tariffs on imports from Canada and Mexico starting next month.

At the same time, last week’s Bybit hack could be reinforcing crypto’s risky rep. ICYMI: Hackers swiped $1.5 billion worth of ether off the exchange in the largest-ever hack to hit crypto, ringing in at more than double the industry’s second-largest incident. 

Great Expectations Get Real

It was supposed to be the best of times: Trump’s campaign was full of crypto-friendly promises, like making the US “the crypto capital of the planet.” But wins under his administration so far may have been too small to outweigh macroeconomic concerns. 

The biggest Trump-era moves perceived as pro-crypto have happened at the SEC:

• SEC chair Gary Gensler, who led a crypto crackdown, left office. Trump’s pick, Paul Atkins, as well as the interim appointee currently keeping Atkins’ seat warm, Mark Uyeda, are both crypto backers.
• In the past week, the SEC dropped investigations into crypto exchange Coinbase, NFT marketplace OpenSea, and Robinhood’s crypto arm, ushering in an era of relaxed regulations.

Meanwhile, the industry’s waiting for Trump to establish the national bitcoin stockpile he promised. The president issued an executive order in January calling for a group to be formed to look into the possibility of creating the stockpile — but not to actually create it.

The Vibe Shifts Quick: Bitcoin was able to stay above $90,000 for months, after breaking that barrier in November. Before Trump won the presidential election, it was trading at just below $70,000. That goes to show that crypto is especially sensitive to vibe shifts as a risk-on asset, and its fellow cryptocurrencies tend to trend in its direction.