Crypto Market Plummets 27% as Trump Tariffs Spark Sell-Off

Economist Peter Schiff, a long-time critic of digital assets, has seized on the recent market downturn to renew his warnings about the crypto market. In response to the tariffs imposed by former U.S. President Donald Trump, Schiff has claimed that the dip in Bitcoin and Ethereum prices signals that the crypto market is "finally starting to crack."

Trump's newly announced tariffs sent shockwaves through both traditional and digital markets. Bitcoin, which initially seemed resilient, dropped 5.6% and is now trading at $78,769, marking a 27% decline from its all-time high in January. Ethereum fared even worse, falling 12% to $1,591, more than 67% below its November 2021 peak. The sell-off extended beyond crypto, with U.S. stock futures slipping and Asian markets experiencing significant declines.

The market turmoil resulted in massive crypto liquidations, with over $892 million in positions wiped out in just 24 hours. Of this, $300 million came from Bitcoin longs and shorts, highlighting the market's instability. Schiff used this moment to criticize Trump's involvement with crypto, sarcastically tweeting about the idea of a Strategic Bitcoin Reserve.

Schiff also pointed out that even meme coins, such as the Official Trump meme coin, have not been spared from the market downturn. The coin has dropped 13.6% in the past day and is now priced at $7.93, an 89.1% plunge from its January high. Schiff found it "appropriate" that this coin is leading the fall, emphasizing his stance against crypto.

Schiff questioned the support some crypto leaders have shown for Trump's trade decisions, offering three possible reasons: they may be uninformed, seeking Trump's continued support, or believing the economic harm will benefit Bitcoin. He has long opposed government involvement in crypto, warning of potential losses for everyday investors.

Schiff's criticism extends to prominent figures in the crypto community, such as Michael Saylor, the CEO of MicroStrategy. He mocked Saylor's advocacy for Bitcoin, questioning its value and warning of risks for companies heavily invested in it. Schiff's views reflect a broader sentiment among some analysts who are critical of the crypto market's volatility and speculative nature.

Schiff's stance is rooted in his belief that traditional assets, like gold, offer a more stable store of value compared to digital currencies. His comments have sparked debates within the financial community, with some agreeing with his assessment while others remain optimistic about the long-term prospects of cryptocurrencies.

Schiff's reaction to Trump's tariffs highlights the interconnected nature of global economic policies and financial markets. The tariffs have been a contentious issue, with critics arguing that they have led to increased market volatility and uncertainty. Schiff's comments serve as a reminder of the need for caution and careful consideration when investing in cryptocurrencies, as the market continues to evolve.