Crypto Market Takes a Hit as $130 Billion Vanishes, Here’s What Happened

The cryptocurrency market has been facing a major downturn since last week, with $130 billion vanished as investors reacted to U.S. President Donald Trump’s proposed tariff plans. The uncertainty surrounding global trade policies made things different for markets, causing a sell-off across major digital assets. Traders and institutions quickly moved to reduce risk, leading to a wave of liquidations and price drops across the board.

Bitcoin (BTC), which has always held the market strong, dropped by 5.9%, struggling to hold support levels as selling pressure increased. Ethereum (ETH) suffered even more, a drop of a total of 10.9%, creating concerns over regulatory scrutiny and declining network activity. With billions removed from the market in a matter of days, many are wondering whether this is just a temporary shake or the start of a deeper correction. As global economic conditions and regulations continue to change, crypto traders are left unanswered, waiting for signs of stability or any further turbulence ahead.

What’s Causing the Sell-Off?

Rising Economic Fears as Trump’s Tariffs and Market Uncertainty have raised the concerns of Investors. The global economy is now shifting as former U.S. President Donald Trump’s proposed tariffs on $1.5 trillion worth of imports are set to take effect by the end of April. These tariffs are expected to have big consequences, which might increase prices, and also increase trade measures from other nations. The uncertainty of these policies has left investors in confusion, contributing to volatility in both traditional markets and the crypto space. Due to this disturbance, investors rapidly shift towards gold, which is a better source. Gold prices are increasing, and so is the demand as market participants want stability. The concerns are growing over inflation, currency fluctuations, 

Increasing Concerns Over Economic Uncertainty

Economic Policy Uncertainty (EPU) Index reached new heights, making the market anxious. This rise in uncertainties will lead to short-term sell-offs across risk assets, which include stocks and cryptocurrencies. Investors will take their money out of markets during such times and look for safer investments like bonds, cash, or gold. This triggers liquidations in the crypto market. According to this, Bitcoin will ultimately benefit as more investors recognize its role as a decentralized asset. Now the question is whether institutional investors will increase their Bitcoin allocations or will traditional assets like gold remain a safe choice?

Will Crypto Bounce Back?

The Bitcoin and altcoins remain bearish, as global markets are reacting to economic uncertainties. After Trump’s announcement, Investors have been pulling back from risk assets, which will take effect on April 2. These tariffs can impact $1.5 trillion in imports, which might raise concerns about rising costs, inflation, and economic slowdowns. As a result, the tension can intensify across traditional markets, and the crypto space is no exception.

However, this scenario looks challenging, analysts are of believe that crypto could be an emerging winner. If inflation rises, currencies get weak due to aggressive government policies, investors may turn to Bitcoin and other coins as a hedge against economic instability. Periods of inflation and currency devaluation have driven more capital into scarce assets like gold and Bitcoin, which are perceived as stores of value.