Crypto Market Cracks Amid Trump Tariffs, Bitcoin Drops 27%

Economist Peter Schiff has expressed concerns about the stability of the cryptocurrency market, stating that it is "starting to crack" amidst broader market slides triggered by President Trump's aggressive tariff policies. Schiff's comments come as global markets experience significant volatility due to the imposition of new tariffs, which have led to widespread economic uncertainty.

Schiff, known for his skeptical views on cryptocurrencies, has long argued that digital assets lack intrinsic value and are subject to speculative bubbles. His recent remarks suggest that the current market conditions, exacerbated by Trump's tariffs, are putting additional pressure on the crypto market. Schiff's analysis aligns with broader concerns about the economic fallout from the tariffs, which have been described as potentially causing long-term harm to the economy.

Schiff took aim at Trump’s decision to impose tariffs, which have triggered declines in digital assets and equities globally. He posted, “I thought the dumbest thing Trump would do was establish a Strategic Bitcoin Reserve. I was wrong.” Despite some initial chatter on Friday about crypto's resilience to the tariff news, Bitcoin fell 5.6% over the past 24 hours to $78,769, down 27% from its all-time high of $108,786 on January 20. Ethereum dropped 12% to $1,591, down more than 67% from its November 2021 peak.

Schiff, who is a founding member of Euro Pacific Asset Management, also pointed to the performance of the Official Trump meme coin, calling it “appropriate” that it was leading the decline. The token, launched by the president earlier this year, is down 13.6% in the past day, now trading at $7.93—an 89.1% drop from its January 19 high of $73.43. A longtime critic of the crypto industry, Schiff also expressed concern about what he described as industry leaders’ broad support for Trump’s trade policies. “There are three possible explanations,” he wrote. “1) They're actually this dumb? 2) They need to back anything Trump does to secure his continued support. 3) They believe the economic harm will benefit Bitcoin.”

Schiff has previously opposed initiatives linking government policy with crypto markets, including the Strategic Bitcoin Reserve proposal, and argued that Trump’s alignment with the crypto industry could lead to widespread losses for retail investors. The economic uncertainty has also affected other sectors. The impact of Trump's tariffs has been felt across various sectors, with the Dow Jones Industrial Average and other major indices experiencing substantial declines. The Nasdaq and S&P 500, for instance, plummeted nearly 6% following the announcement of sweeping tariffs. This market turmoil has raised questions about the resilience of different asset classes, including cryptocurrencies.

The broader economic landscape remains uncertain, with analysts predicting that the tariffs could lead to further market volatility. The administration's tariff policies have sparked a range of reactions, from protests to calls for new trade agreements. As the situation continues to evolve, investors and economists alike are closely monitoring the impact of these policies on the global economy. The White House has defended its tariff policies, asserting that they are necessary to address economic imbalances and protect domestic industries. However, critics argue that the tariffs are causing more harm than good, leading to job losses and economic instability. The administration's stance has been met with mixed reactions, with some economists predicting that the tariffs could lead to a prolonged period of economic uncertainty.