Cryptocurrency Falls Despite Trump’s Support
Cryptocurrency prices declined further on Monday, extending losses as traders grew anxious over the global economic outlook. Despite a week of pro-crypto announcements from President Donald Trump, risk sentiment remained weak.
Bitcoin dropped as much as 3.7%, hitting a low of $82,568, as of 11:30 a.m. in London. The broader cryptocurrency market followed, with key tokens like Ethereum and Solana sliding.
Trump’s initiatives — including a strategic US Bitcoin reserve and a summit with crypto executives — failed to inspire a sustained rally.
Fed Signals and Tariffs Drive Market Uncertainty
The Federal Reserve’s decision to pause rate cuts in December created a headwind for all risk assets, including cryptocurrency.
Friday’s US jobs report added fuel to recession concerns. While unemployment ticked up to 4.1%, a large increase in underemployment raised red flags.
“Recession fears and tariff uncertainty have pushed yields lower,” said Augustine Fan from SignalPlus. “Rate cuts are now likely delayed until early summer.”
Market Underwhelmed by Crypto Summit
Expectations were high ahead of the White House Crypto Summit, but the outcome disappointed investors. Trump’s team confirmed the crypto reserve will only include seized digital assets, not new capital injections.
Jeff Mei, COO at crypto exchange BTSE, said:
“The summit felt underwhelming. Cryptocurrencies dropped when it became clear the reserve wouldn’t include new purchases.”
Currently, the US government holds approximately $17 billion in Bitcoin, with another $400 million in other tokens, mostly tied to legal forfeitures.
Investors Skeptical of Asset Selection
Some investors were further spooked by the lack of transparency around which assets the crypto reserve would hold.
Ari Paul of BlockTower Capital noted:
“The favoritism in token selection — especially after the Trump and Melania coins — discouraged serious investors.”
The sentiment has shifted. The cryptocurrency market now resembles a short-term speculation arena, rather than a long-term investment opportunity.
Outflows from Bitcoin ETFs Accelerate
Since February, investors have withdrawn $4.4 billion from US-based Bitcoin ETFs, reflecting declining optimism.
These ETFs had powered Bitcoin’s run to its all-time high of $109,241 last year. Now, Bitcoin is down 25% from that level.
The broader cryptocurrency market has lost over $1 trillion in value since peaking, according to CoinGecko data.
What Could Spark a Crypto Rebound?
According to analysts, only a few events could revive cryptocurrency prices in the near term.
- A resolution to the US-China tariff war
- A renewed commitment by the Federal Reserve to cut rates
- Clearer and fairer crypto regulations
Jeff Mei added:
“Bitcoin could fall further to the $70,000-$80,000 range. A real rally may only return with lower interest rates and trade peace.”