Trump’s impact on the crypto market, Ethereum, and XRP is experiencing carnage in response to Trump’s policies and announcements. On Wednesday, the total market capitalization of Trump’s impact on the crypto market was down to $2.784 trillion.
Btc0.33% Bitcoin with the S&P 500 is 0.75 in the 30-day timeframe. They are signaling to traders that the top crypto behaves like U.S. equities. Trumpism, or what U.S. President Donald Trump believes in a particular moment in a specific day about a subject that has ushered a steep correction in crypto within the first fifty days of his administration.
U.S. Stocks and Crypto Decline
Trump’s impact on crypto market U.S. stocks are facing a slump; the S&P 500 is down nearly 8% in the past month and is lower than it was the day before President Trump won the 2024 election. Per the index, $4.5 trillion in capital has been wiped out of the market, and the correction is not limited to equities. Crypto, typically considered one of the high-volatility risk assets, has faced a steep decline as traders turn risk-averse and pull capital from the category.
While U.S. stock performance is among the worst ever recorded within the first 50 days of a new administration, crypto market capitalization is nearly 20% above the pre-election level, even after the correction.
When Bitcoin crossed the $100,000 milestone and hit a new all-time high, Ethereum and XRP rallied alongside. However, the market-wide bloodbath has ushered in a decline in the top three cryptos, which are down nearly 15%, 28%, and 9% in the past month, according to TradingView data.
Trump’s pro-crypto executive orders and the announcement of the Strategic Crypto Reserve have failed to catalyze a positive sentiment among traders. Alternative. My Crypto Fear & Greed Index shows traders remain fearful on Wednesday.
Trump’s Return and Alternative
In a February report, Forbes evaluated the impact of Donald Trump’s return to the presidency on alternative investments like digital assets. The publication outlined that it depends on “the details of policy implementation, market expectations, and global economic conditions. While some sectors may benefit from deregulation or tax incentives, others might face reduced government support or policy shifts.”
Traders, therefore, need to proactively switch strategies and adjust portfolios, trade headline to headline, and anticipate potential changes, such as the inclusion of different tokens in the U.S. Strategic Crypto Reserve, to prioritize token categories that are likely to receive favorable treatment or have inherent resilience to policy-induced volatility.
Crypto Market Struggles
After nearly four consecutive weeks of correction, the crypto market and top three tokens declined this week. As crypto traders digest Trump’s tariff wars and executive orders, institutions and market participants have turned risk-averse and realized losses in Bitcoin are mounting. At this critical juncture, financial easing could potentially boost the value of crypto tokens as traders increase their demand for riskier assets. However, the sector faces significant challenges due to geopolitical headwinds and Trumpism.
The debate on whether a Strategic Crypto Reserve would meet the expectations of the crypto community and what the inclusion of Ethereum eth-3.14%Ethereum, XRP xrp0.1%XRP, Solana sol-0.44%Solana, and Cardano ada-3.74% Cardano means for holders of the token wages on social media platforms. Traders now wait and watch for the narrative to unfold. It is typical for the Bitcoin price to drop between 20 and 25% before it rallies during a bull market. However, the macroeconomic headwinds and higher number of market movers make it challenging to predict BTC price trends in the coming weeks and months.
The $80,000 level remains a crucial support for Bitcoin price; a return to the $100,000 milestone could see BTC rally towards its all-time high and test it. However, a decline from $80,000 could push the token to pre-election levels under $70,000. Another 15% drop from the current price level could erase all post-election gains for Bitcoin.
Crypto Market Sentiment
Bitcoin and XRP traders have consistently made profits from their holdings since mid-February. However, in Ethereum’s case, traders’ behaviour is akin to capitulation. Traders have realized losses on their Ether holdings, as seen by the harmful spikes in the network’s realized profit/loss metric on Santiment. Capitulation is followed by price stability; however, whether Ether’s price will recover in the coming weeks and months remains to be seen.
The total open interest in USD in the three tokens has steadily declined since the last week of February. This implies that derivatives traders are losing interest in the top 3 cryptos, which aligns with the risk-off sentiment and the U.S. stock market bloodbath.
Final thoughts
The paper offers a thorough picture of how political events, including Trump’s proposals, are affecting crypto markets, but it also reveals that the main causes of this fall are more general economic ones, including the performance of U.S. stocks and macroeconomic uncertainty.
Under close examination is the “Bitcoin as a hedge” story, and crypto is progressively recognized as a fluctuating risk asset rather than a safe refuge.