The world’s biggest digital currency, Bitcoin, dropped by 9.52%, falling back to $83k and losing all the gains it had managed to accrue during a brief surge over the weekend.
The surge which allowed the cryptocurrency to hit over $94k was as a result of the excitement over the creation of a U.S. Crypto Strategic Reserve, which was driven and proposed by the U.S. President Donald Trump. But the exhilaration quickly led to a combination of skepticism and new geopolitical tensions that caused the market to pull back, leading to a drop.
This comes two days after President Trump announced the strategic inclusion of Bitcoin, Ethereum, Cardano, SOL, and XR P, into a new U.S. crypto reserve for cryptocurrencies. After the announcement, Bitcoin, said to be the heart of this reserve, immediately saw an 11% jump, where it rose from $83,900 to $94,164.
Other cryptocurrencies also had significant surge, reflecting the influence President Trump had, as well as underscoring the significance of a government-backed involvement in the crypto market.
However, these gains were only sustained for a very short period of time. Market researchers have attributed two reasons to its fall: President Trump’s Tariff Imposition, and Market (Bitcoin) Volatility.
U.S. President Trump, after promising to impose tariffs on countries who had a major market presence in the country in an announcement in February 2025, finally initiated a trade war with countries like China, Mexico, and Canada. On Canadian and Mexican imports, he imposed 25% tariffs. On Chinese imports, he added another 10% on an already imposed 10% in February, making it a total of 20% tariffs.
Market researchers saw a decline in the crypto market after the announcement of the new tariffs that was put into effect by President Trump, resulting in an immediate sell-off of its market cap.
The new tariffs allowed for a retreat from trading volatile assets, especially Bitcoin, where it dropped over 9.5% in a day – from $94k to below $83k. Its market cap also fell to $1.66 trillion, with BTC’s dominance now at 60.22%.
Bitcoin, an already volatile cryptocurrency, might continue to suffer more fall and more volatility based on how the imposed tariffs will affect the economy. The unpredictability and the concern surrounding new crypto frameworks and global trade at large will also affect Bitcoin’s position in the crypto market. As a result of this, market experts are now advising caution.
With the advice of taking caution by market experts also comes the promise of a Bitcoin rebound. Alankar Saxena, CTO and Co-founder of Mudrex, an Indian cryptocurrency investment platform, notes that for a rebound to, however, happen with Bitcoin, “investor confidence needs to return, especially with the geopolitical uncertainty and tariff issues hanging over the market.”
While Bitcoin is now taking a backseat as a result of this event, investors are now migrating to investing in safer assets (stablecoins) due to the rising unreliability and volatility associated with Bitcoin. Recent CoinMarketCap data shows stablecoins’ trading volume at approximately $70.84 billion, accounting for 94.89% of total crypto trading volume.
