Bitcoin and Solana experience sharp drops in value, prompting questions about the current state of the crypto market.

Bitcoin and various other cryptocurrencies experienced a sharp decline in value as a result of uncertainties surrounding the implementation and regulatory approval of the US Crypto Strategic Reserve and Trump Tariffs. This abrupt shift in the crypto market followed the announcement made by former President Donald Trump regarding the establishment of the US Crypto Strategic Reserve.

In the aftermath of Trump’s revelations, Bitcoin witnessed a significant drop of nearly 10%, with other cryptocurrencies plunging by as much as 20%. Analysts highlighted that investor sentiment towards cryptos was adversely affected by doubts surrounding the implementation and regulatory acceptance of the US Crypto Strategic Reserves, alongside economic uncertainties exacerbated by Trump Tariffs.

As of 12:41 pm, the price of Bitcoin stood at $84,119.28, with a market cap of $1,668.25 billion and a 24-hour trading volume of $76.75 billion. The decline of Bitcoin by -9.47% within the last 24 hours underscored the extreme volatility experienced in the crypto market, reflecting the sensitive nature of the sector to policy changes and the necessity for more defined regulatory frameworks.

Avinash Shekhar, co-founder and CEO of Pi42, explained, “The crypto market experienced extreme volatility following former President Donald Trump’s announcement of a US Crypto Strategic Reserve, initially driving Bitcoin, Ethereum, and other major tokens higher. However, gains were short-lived as scepticism over implementation and regulatory approval led to sharp corrections.” He further emphasized that Trump’s proposed tariffs against China contributed to heightened economic uncertainty and triggered a broad market sell-off.

The abrupt market fluctuations were not limited to cryptocurrencies, as US President Donald Trump’s imposition of new tariffs on imports from Mexico and Canada, along with increased duties on Chinese goods, led to a 2% downturn in the S&P 500 index. Additionally, China’s retaliatory measures of imposing additional tariffs on certain US imports from March 10 further fueled concerns about an escalating global trade war.

Notably, Bitcoin’s value dipped below $80,000 following the introduction of Trump Tariffs, subsequent to reaching an all-time high of $109,350 in January. However, the announcement of the crypto reserve by Trump on Sunday provided a momentary boost to Bitcoin, propelling it above $94,000 before the subsequent decline.

In a related development, the Securities and Exchange Commission (SEC) has withdrawn lawsuits against several cryptocurrency entities, including Kraken and Yuga Labs. These regulatory shifts, coupled with geopolitical events such as Trump Tariffs and escalating trade tensions, have contributed to the heightened volatility experienced in the crypto market.

Overall, the recent turbulence in the crypto market underscores the sector’s vulnerability to regulatory changes and geopolitical events. The need for clear regulatory frameworks and policies remains imperative to instill confidence among investors and stabilize the crypto market amidst uncertainties.