Crypto market falters as US trade tariffs bite

Hola folks!

The global crypto market saw a major shift in sentiment over the weekend as US trade tariffs ignited fears of a prospective global trade war. The benchmark cryptos Bitcoin and Ether saw corrections in price as selling pressure intensified. 

While the crypto market corrected, Bitcoin ETFs recorded impressive inflows, suggesting that institutions might be buying the dip to capitalize on the market correction. The current week is packed with multiple economic data releases that can cause volatility in the market. Read to learn more about developments in the last week that impacted the markets and what the coming week has in store.

February began on a sour note for the crypto market, with Bitcoin taking a heavy hit, sliding to a low of $91,231 as a renewed US-triggered trade war rattles risk assets.

Beyond crypto, macro uncertainty is also intensifying. US stock futures tumbled as President Donald Trump acknowledged a "little pain" from tariffs on China, Canada, and Mexico. This comes at a crucial time—with manufacturing data, employment figures, and earnings reports of 20% of S&P 500 firms expected this week. 

Amid the uncertainty, all eyes are on the Federal Reserve, as officials' comments could give clues about the direction of interest rates and inflation management in a volatile economic landscape. 

Interestingly, despite the crypto sell-off, Bitcoin ETFs saw a stunning $588 million inflow in a single day, led by BlackRock and Fidelity—suggesting institutions might be buying the dip while retail traders panic.

Regulation is adding another layer of uncertainty. Kraken is delisting stablecoins for European users, India is reconsidering its crypto stance amid shifting global policies, and a lawsuit now claims all Pump.fun tokens are unregistered securities. 

UBS is experimenting with blockchain for fractionalized gold investments, and Korea’s “Kimchi Premium” surged to 10%—a worrying sign for short-term BTC volatility. With markets reeling, the next few days will be crucial: will Bitcoin find support, or is another wave of selling on the horizon?

The fears of a global trade war led to panic selling in the crypto market, leading to mass liquidations, wiping billions from the market. Altcoins saw brutal “capitulation wicks”—Ethereum dropped 16% in an hour, and Avalanche, XRP, and Dogecoin plunged over 20%. 

The Crypto Fear & Greed Index nosedived by 30 points in three days, signaling a sharp sentiment shift as traders reassess risk.

Weekly price movement: 

• BTC $95,774 ⏬ 3.21% 

• ETH $2,581 ⏬ 15.44%

• XRP $2.38 ⏬ 15.16%

• DOGE $0.2508 ⏬ 20.09%

(All data here as of 3.00 p.m., 3 February 2025)

Before we conclude, here’s a quick look at some important news from around the crypto world.

• Proof-of-stake blockchain Cardano switched to decentralized governance on Jan. 29 after the Plomin hard fork took effect, Cardano Foundation, a non-profit foundation backing the project, said on X. Read more here.

• India’s government is currently mulling a shift in its regulatory approach to crypto, which could shift the rate of adoption in the country, which has ranked highly on crypto adoption metrics in recent years. Read more here. 

That’s it for now. Thanks for sticking around.

See you later, folks! 👋

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