- The total crypto market fell 16% over the past two weeks.
- Trump’s trade war rocked global markets.
- But some traders used the dip to position themselves for the next leg up.
Investors have piled into bets that crypto will reach new heights, according to eToro data.
The number of long crypto positions opened on April 7 — the day US President Donald Trump’s global trade war pushed Bitcoin’s price down to $74,440 — was 153% higher than the average number opened per day in March, according to the trading platform.
“Crypto investors on the platform saw this as a good entry point to add further to their positions, or get back in again,” Simon Peters, crypto market analyst at eToro, told DL News on Thursday.
“As the dust starts to settle around tariffs, and if financial conditions start to loosen… this could lead the way for the next upwards move and fresh all-time highs — and it seems this is what the retail investor is banking on,” Peters said.
He pointed to factors that could drive the rally: a weakening US dollar, lower bond yields, rate cuts from the Federal Reserve, and increased liquidity due to government debt refinancing.
The CME FedWatch tool puts a 19% chance on a rate cut in May, and a 70% chance that it will do so at its July meeting.
Lower interest rates tend to incentivise investment in risk-on assets like crypto.
‘Yippy’
The optimism comes after Trump rattled global markets by slamming about 100 nations with stifling tariffs.
Risk-on assets like cryptocurrencies and tech stocks have been particularly hard hit. The Nasdaq dropped just over 14% over the past two weeks.
The total value of the crypto market fell about 16%, or $466 billion.
Then Trump announced a 90-day pause to his sweeping tariffs after saying that the reaction to the levies were getting a bit “yippy.”
The about-face saw the Nasdaq enjoy its best day since 2001 as it surged 12%. The S&P 500 jumped 9.5%, its biggest gain since 2008.
The crypto market surged by almost 11% on the back of Trump’s reversal. It now has a total value of $2.6 trillion.
‘The mood is tense’
Peters is not the only one to suggest that traders are bullish about the future.
“The mood is tense but not outright pessimistic,” Timo Lehes, co-founder of crypto trading firm Swarm Markets, told DL News hours before Trump flip-flopped on the tariffs.
“Macroeconomic pressures and regulatory uncertainty are ongoing pressures, but it’s tempered by a stubborn optimism that’s typical of crypto natives.”
Earlier this week, UK bank Standard Chartered held on to its prediction that Bitcoin will hit $200,000 by the end of 2025.
BitMEX co-founder Arthur Hayes said he expects it to hit $250,000 in that period.
Crypto market movers
- Bitcoin rose by 5.1% over the past 24 hours to trade at $81,499.
- Ethereum rose by 6% to trade at $1,575.
What we’re reading
- Traders are running out of safe havens. Now should be Bitcoin’s time to shine ― DL News
- 90 day pause on tariffs! — Milk Road
- Weekly Recap: Trump Tariffs Sink Crypto, BlackRock Pumps Bitcoin’s Bags ― Unchained
- Is it time to freak out? — Milk Road
- Deutsche Bank crypto exec questions $19tn tokenisation market: ‘Is it probable?’ ― DL News
Eric Johansson is DL News’ News Editor. Got a tip? Email at eric@dlnews.com.
