Crypto Firms Reel as Trump Tariffs Spark 10% Market Drop
1min read Cryptocurrency firms faced significant challenges this week as US President Donald Trump's sweeping tariff rollout sent shockwaves through the markets, leading to a broad sell-off across various sectors and stalling initial public offering (IPO) plans. The tariffs, announced on April 2, imposed at least a 10% levy on nearly all imports into the United States and additional "reciprocal" tariffs on 57 countries. This move triggered market turmoil, with major US stock indices, including the S&P 500 and Nasdaq, declining by approximately 10% as traders braced for an impending trade war.
Cryptocurrency firms were particularly hard hit, with exchanges and Bitcoin miners seeing their stock prices plummet. Despite the industry's generally positive relationship with the US president, crypto stocks suffered as much, if not more, than other sectors. coinbase, a prominent ally of Trump during the November US elections, saw its stock price drop by roughly 12% in the aftermath of the tariff announcement. The CoinShares Crypto Miners ETF, which tracks a diverse basket of Bitcoin mining stocks, lost about 13% of its value since the tariff news broke. Even Strategy, one of the best-performing stocks of 2024, was not spared, with its share price falling by around 6%.
The impact of the tariffs extended beyond stock price volatility, affecting IPO plans as well. Stablecoin issuer Circle reportedly paused its plans for a 2025 IPO, citing market turbulence. Circle had filed to take the company public on April 1 but is now "waiting anxiously" before taking further steps. This hesitation is shared by other companies, including fintech Klarna and ticketing service StubHub, which are reportedly considering altering or shelving their IPO plans.
The broader economic outlook has also been affected by the tariffs. According to an investment bank, the estimated odds of a global economic recession in 2025 have been raised to 60% from 40% previously. The bank noted that "disruptive U.S. policies have been recognized as the biggest risk to the global outlook all year." The effects of the tariffs are expected to be magnified through retaliation, a slide in U.S. business sentiment, and supply-chain disruptions.
Ask Aime: What impact have US President Donald Trump's tariffs had on the cryptocurrency sector?
One notable exception to the market turmoil is Bitcoin itself. Some analysts suggest that Bitcoin is finally "decoupling" from the broader market, with its spot price holding above $82,000 this week despite the collapse of US equities markets. This decoupling could indicate that Bitcoin is increasingly being seen as a safe haven asset, independent of traditional market fluctuations.
