March 10, 2025: Major Crypto and Stock Market Collapse

On March 10, 2025, both the crypto markets and US stock exchanges experienced significant declines, with US stocks erasing over $1.75 trillion from Wall Street due to political uncertainty, investor outflows, and external shocks.

Even the crypto market suffered billions in losses, with Bitcoin (BTC) plummeting to $77,393 and the overall cryptocurrency market capitalization falling to $2.57 trillion.

Five Main Factors Behind the Collapse

1. The new Trump tariffs and the trade war
2. Disappointment in the United States strategic crypto reserve
3. Massive capital outflows from crypto
4. The Bybit hack and the crisis of trust in exchanges
5. Fear and volatility dominating the markets

The New Trump Tariffs and the Trade War

The return of Donald Trump to the White House has shaken global markets. His decision to impose new tariffs on imports from China, Canada, and Mexico has fueled fears of a new trade war.

• Dow Jones -2.3%, S&P 500 -3.1%, Nasdaq -4.3%: The U.S. stock market experienced its worst day since 2022.
• Recession risks: Trump has refused to rule out a recession, increasing uncertainty and market volatility.
• Commercial retaliations: China has threatened countermeasures, such as tariffs on American technological and agricultural goods, escalating global economic tensions.
• Impacts on the manufacturing industry: U.S. companies reliant on imported raw materials and components face increased production costs.
• Bitcoin falls below $80,000: The combination of the trade war and reduced market liquidity has impacted the crypto sector.

Disappointment on the United States Strategic Crypto Reserve

On March 6, 2025, the president signed an executive order to create a Strategic Crypto Reserve. However, the lack of immediate Bitcoin purchases by the government disappointed the market.

• BTC -4% in 24 hours: The absence of reserve support contributed to a rapid loss in value.
• Liquidations for $650.8 million: The pressure on leveraged positions led to forced sales in the crypto market.
• Crypto Fear and Greed Index at 20: Investor sentiment is in extreme fear territory.

Massive Capital Outflows from Crypto

Investment funds in cryptocurrencies have recorded significant capital outflows.

• $876 million in outflows during the week of March 7.
• $4.75 billion in outflows monthly.
• Assets under management fell to $142 billion.
• Bitcoin accounted for $756 million of the outflows.
• Impact on safe-haven assets: As cryptos crash, gold and bonds gain, signaling a flight to safety.

The Bybit Hack and Crisis of Trust in Exchanges

On February 21, 2025, the Bybit exchange experienced a hacker attack costing $1.46 billion, linked to North Korean groups.

• Exodus from exchanges: Fear of more attacks has prompted many investors to withdraw funds.
• Increased withdrawals and sales: Diminished confidence in trading platforms has triggered a rush to sell.
• Imminent regulatory interventions: Regulators intensify oversight, potentially restraining the market further.

Fear and Volatility Dominate the Markets

Uncertainty regarding Trump’s economic policies and recession risks have magnified market volatility:

• Tesla -14%: The drop reflects concerns in the tech sector.
• S&P 500 negative year-to-date: The index closed out its fourth consecutive day of losses.
• Bitcoin down 12% last week: Investors are fleeing speculative assets.
• Increased global volatility: European and Asian stock markets feel the ripple effect of the American crisis.
• Federal Reserve acknowledges the crisis: The Fed notes that uncertainty over interest rates is fueling market instability, corroborated by CoinShares’ data on unprecedented crypto capital outflow.

What to Expect in Coming Months

The market remains in a phase of high volatility and uncertainty. However, some factors may induce recovery:

• Possible reconsideration by the Fed: If market suffering continues, the Federal Reserve may revisit its interest rate policy.
• Stabilization of Trump’s policies: Clarification of long-term economic strategies could help restore market equilibrium.
• Recovery of the crypto market: Once liquidations cease and confidence returns, Bitcoin and major cryptocurrencies could rebound.

The collapse of March 2025 underscores the interplay between politics, regulation, and financial markets. Trump’s actions, cyberattacks, and capital outflows created a perfect storm.