SINGAPORE / NEW YORK — April 7, 2025 — The global cryptocurrency market extended its slide on Monday as escalating U.S. trade tensions and macroeconomic shocks triggered widespread risk aversion. The turmoil, catalyzed by President Donald Trump’s sweeping tariff policy, has rattled both traditional financial markets and digital assets, deepening the ongoing correction across the sector.
Bitcoin (BTC) fell as low as $77,200, marking a staggering 27% decline from its all-time high of $107,000 reached in December 2024. Ethereum (ETH) also plunged nearly 13% in the last 24 hours to $1,576, dragged down by surging liquidations and institutional outflows. The global crypto market cap now sits at $2.5 trillion, down over 6.4% on the day.
What Triggered the Crypto Crash?
The catalyst behind the market rout is the announcement of a 10% blanket tariff on all U.S. imports, with additional penalties targeting trade surplus nations like China, Germany, and Japan. Speaking over the weekend, President Trump reaffirmed his stance, calling tariffs “a beautiful thing” and rejecting any potential deal with China until the U.S. trade deficit is addressed.
The fallout was immediate and brutal. U.S. equity markets saw their worst two-day performance since the COVID-19 crash, with $5.4 trillion in value wiped out. The S&P 500 and Nasdaq 100 have officially entered bear market territory, falling 6% and 5.8%, respectively. The tremors quickly spread to Asia-Pacific markets, where futures slid more than 5% as crude oil prices dipped below $60/barrel for the first time since 2021.
Fed and Wall Street React to Tariff Shock
Federal Reserve Chair Jerome Powell, in a Friday address, acknowledged the growing uncertainty, stating: “The impact of tariffs on the economy may be greater than expected… we will wait for greater clarity before further adjustments.” Traders interpreted the comment as a dovish signal, accelerating bets on interest rate cuts.
Fed futures now fully price in a rate cut in June, moved forward from July, and assign a 50% probability of a fourth cut by December. Meanwhile, the 10-year U.S. Treasury yield dipped below 4%, its lowest since October 2024, signaling mounting investor fear.
In a sharp reversal, JP Morgan downgraded its U.S. GDP forecast for 2025 to -0.3%, down from a previously expected +1.3%, citing the cumulative drag from tariffs and global demand shocks.
Crypto Sentiment Sours Amid Institutional Outflows
According to Glassnode and CoinShares, crypto exchanges witnessed over $1.2 billion in net outflows from institutional accounts over the weekend, the highest since the Terra-LUNA collapse in 2022. Leverage unwinding and forced liquidations compounded the pain, especially for altcoins and DeFi tokens.
Prominent altcoins including Solana (SOL), Avalanche (AVAX), and Chainlink (LINK) dropped between 10–15% in 24 hours. DeFi Total Value Locked (TVL) dropped 8% across major protocols, with Uniswap, Aave, and Curve Finance seeing significant withdrawals.
Crypto derivatives markets also saw a shakeout. Open interest in BTC futures declined 22% on Binance and Bybit, signaling reduced risk appetite.
Market Outlook: Where Do We Go From Here?
Analysts at Goldman Sachs and ARK Invest say the crypto market is now “tethered to macro conditions” more than ever. The rising correlation between BTC and equities underscores the asset class’s evolving behavior in institutional portfolios.
With U.S. trade policy dominating headlines, markets are increasingly sensitive to “tweet risk” and policy pronouncements from the Trump administration. Any escalation with China or tariff expansions could deepen risk-off flows and amplify crypto volatility.
Still, long-term bulls point to eventual rate cuts, ongoing inflation concerns, and increasing tokenization in finance as structural tailwinds for digital assets.
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