- Crypto has lost 12% of its total value in the past week.
- Here’s where industry insiders expect the market to go next.
Prepare for pain.
That’s pretty much the upshot of what crypto industry stakeholders and analysts say one week after Donald Trump’s tariffs triggered a wipeout of some 12%, or $335 billion, of the total cryptocurrency market.
At least, that’s what they say to expect in the short term. More long-term, traders seem hopeful.
“The mood is tense but not outright pessimistic.” Timo Lehes, co-founder of crypto trading firm Swarm Markets, told DL News. “Macroeconomic pressures and regulatory uncertainty are ongoing pressures, but it’s tempered by a stubborn optimism that’s typical of crypto natives.”
He and other experts shared their insights as the US president’s sweeping levies against dozens of countries kicked in on Wednesday.
Short-term pain
Risk-on assets like cryptocurrencies and tech stocks have been particularly hard hit by the market downturn. The tech-heavy Nasdaq 100 has dropped about 11% over the past week.
“This kind of macro uncertainty tends to trigger a risk-off response, with investors pulling back as they wait to see how things unfold around growth, policy, and trade,” Richard Teng, CEO of crypto exchange Binance, said in a statement.
Bitcoin has lost 9% of its value over the past seven days to trade at around $77,000, but it may drop as low as $70,000, says Joel Kruger, market strategist at crypto trading firm LMAX Group.
Long-term bullishness
Even as traders brace for more drops, industry insiders remain bullish in their public comments.
Market watchers like BitMEX co-founder Arthur Hayes bet that the US central bank will respond to the crisis by allowing more money to flow through the American economy. If the Federal Reserve does, then he expects Bitcoin to hit $250,000 by the end of the year.
The first hint of how the Federal Reserve will respond will come on Wednesday when it releases the minutes from a March meeting, held before Trump unveiled his tariffs on April 2.
“Any hint of the Federal Reserve leaning toward a more accommodative policy track would likely be a welcome boost for markets, including crypto,” said Kruger.
The CME FedWatch tool gives it a 54% chance that the Fed will cut interest rates in May, and a 96% chance that it will do so at its July meeting. Lower interest rates tend to incentivise investment in risk-on assets.
“There will be some interest rate cut and liquidity injection into the market this year,” Alice Liu, research lead at crypto data firm CoinMarketCap, told DL News. “The magnitude of that or when exactly it’s going to happen is up to the power dynamics of the Fed versus Trump administration.”
Her bet? That it will happen by the third quarter, which will catapult the Bitcoin to new heights, she said.
“We will end the year with a new all-time high,” she said.
Crypto market movers
- Bitcoin is down 2.3% over the past 24 hours to trade at $77,658.
- Ethereum is down 4.4% to trade at $1,489.
What we’re reading
- Aavegotchi ditches Polygon for Coinbase’s Base blockchain ― DL News
- Rate cuts incoming? — Milk Road
- Solana Policy Institute Hires One of DC’s Most Powerful Lobbyists ― Unchained
- Circle’s financial red flags — Milk Road
- Jack Dorsey says Bitcoin will fail if it’s just ‘a store of value.’ Michael Saylor couldn’t disagree more ― DL News
Eric Johansson is DL News’ News Editor. Got a tip? Email at eric@dlnews.com.
