The crypto market had a turbulent week.
After what seemed to be an endless freefall, a promising rally quickly turned into a plunge once again, as investors reacted to a mix of political shifts, economic data, regulatory uncertainty, and mixed sentiment.
Let’s break down what just happened.
Trump’s Pivot Falls Short
Earlier this week, President Trump threw markets a curveball by announcing a pause on reciprocal tariffs for countries that didn’t retaliate against the United States.
This unexpected policy shift sent markets into a brief frenzy. Bitcoin surged 7.7% to $82,967, while Ethereum soared almost 12% to $1,608.95. Altcoins like XRP and Solana also saw strong double-digit gains, and traditional markets followed suit, with the S&P 500 posting an impressive 9.5% surge.
However, the rally didn’t last. As the dust settled and the US proceeded with sweeping 145% tariffs on Chinese goods, traders started to reassess the longer-term implications of the tariff pause. The initial excitement quickly faded as markets began recalibrating. “The market just needed a catalyst to move meaningfully higher,” said Edward Chin of Parataxis.
As Bitcoin and Ethereum pulled back from their highs—Bitcoin slipping to $78,000 and Ethereum retreating to near $1,500—it became clear that crypto investors remain highly sensitive to global trade dynamics.
The volatility was a stark reminder of the market’s fragility, where positive shifts in policy can send prices soaring, but uncertainty quickly brings them back down.
The Fed Holds Their Ground
As markets stumbled, the Federal Reserve continued to hold its ground – pledging to keep interest rates steady, even with growing uncertainty from escalating trade tensions. President Trump’s recent tariff hike on Chinese imports—raising rates to 145%—has unsettled global markets and added to economic headwinds. While other countries’ tariffs were reduced to 10%, the average U.S. tariff rate only dipped slightly, from 27% to 24%, keeping the overall trade burden high.
Fed policymakers are staying focused on preventing a renewed surge in inflation. Core inflation cooled to 2.8% in March, but it still sits well above the Fed’s 2% target. Kashkari noted that the elevated tariffs have further complicated the path forward, raising the bar for any potential rate cuts. Unless job losses accelerate dramatically, the Fed is unlikely to step in with policy easing—leaving markets to navigate the storm largely on their own.
Tariffs and Inflation Risks Loom Large
The markets were briefly buoyed by Trump’s tariff pause, but the risks posed by ongoing trade tensions are far from over. The recent tariff escalation continues to be a significant threat to the global economy, with inflation remaining a major concern for the Fed. While the U.S. tariff rate has slightly decreased, the overall trade burden remains high, and tariffs could continue to push prices higher in the months ahead.
Despite the optimism that briefly surged in crypto prices, the underlying macroeconomic risks remain very much in play. “Tariffs have increased the hurdle for changing the federal funds rate,” said Neel Kashkari. With inflation still above the Fed’s target and the global trade environment uncertain, these factors have tempered the optimism.
For now, investors are being reminded that while crypto offers an exciting opportunity, the broader economic risks must also be taken into consideration.
SEC Shake-Up: A Positive Step Forward
In a more hopeful development, Capitol Hill delivered a significant win for crypto on April 10 with the confirmation of Paul Atkins as the new head of the SEC. The vote passed 52–44, signaling a shift in the regulatory approach.
Atkins, a long-time advocate for pro-innovation policies, is expected to bring more clarity and balance to the SEC’s approach to crypto regulation. His confirmation follows a series of actions under interim SEC Chair Mark Uyeda, including the rollback of aggressive enforcement actions against crypto firms. “Atkins is just one oath away from rewriting the SEC’s crypto playbook,” said one administration official.
With Atkins now at the helm, there’s renewed hope for faster Bitcoin ETF approvals, clearer rules for crypto projects, and an overall friendlier environment for the space.
While the transition will take time, the groundwork for a more accommodating framework is already in place.
Optimism Amidst Uncertainty
Despite short-term volatility, crypto’s outlook remains positive with recent SEC leadership changes and regulatory clarity creating a more supportive environment.
Current market turbulence could benefit Bitcoin if the Federal Reserve injects liquidity to address Treasury market stress, where hedge funds are unwinding $1 trillion in leveraged positions. If the Fed intervenes as it did in 2020, Bitcoin could become “the best performing asset” according to Wintermute’s Jake Ostrovskis.
Bitcoin is reclaiming its role as an uncertainty hedge and maintains 15% year-over-year growth despite recent dips—a trend potentially strengthened by Trump’s tariff pause.
With meaningful regulatory developments coming and growing investor interest, crypto appears well-positioned for future growth when macroeconomic conditions align.
Our aim is to create a platform that offers users the most enjoyable trading experience. If you have any feedback, please reach out to us at support@btse.com or on X @BTSE_Official.
Disclaimer: BTSE blog content is intended solely to provide varying insights and perspectives. It does not constitute financial, legal, or investment advice and should not be relied upon as such. The views expressed are not necessarily those of BTSE. Unless otherwise noted, they do not represent the views of BTSE and should in no way be treated as investment advice. Trading involves substantial risk due to market volatility, and past performance is not indicative of future results. Always trade with caution and consider seeking advice from a qualified professional before making any financial decisions.
