Crypto Market Bleeding

The crypto market is experiencing a downturn due to a broader selloff in tech stocks, driven by concerns over potential trade wars and an impending economic downturn in the US.

On Monday, Bitcoin (BTC) fell by 4% to $80,000, while Ethereum (ETH) dropped by 6% to $1,756, a level not seen since October 2023. Both assets have since recovered somewhat; at press time, BTC is at $81,600 and ETH at $1,920, down 1% and 8% from the previous day, respectively.

The decline in crypto prices is linked to a significant drop in the Nasdaq 100 Index, which had its worst day since October 2022, falling by 3.8%. Economic analysts are raising concerns about a potential economic slowdown in the U.S. Donald Trump has warned of potential disturbances due to trade wars with Canada, Mexico, and China.

> “Now that the industry has its strategic Bitcoin reserve executive order, crypto has one fewer positive forward catalyst to price in, and we’re left at the mercy of macro risk appetites,” said Joshua Lim, FalconX Global Co-Head of Markets.

The impact of the stock market crash is also reflected in the decline of stablecoin inflows. Matrixport reported a drop of over 50% in stablecoin inflows, coinciding with Bitcoin’s price decline from its peak. In December 2024, stablecoin minting peaked at approximately $1.8 billion but fell to between $0.4 billion and $0.8 billion by March 2025.

Stablecoins are crucial for providing market liquidity, which means a drop in their minting can directly affect crypto demand and push the market into consolidation. Matrixport analysts attribute this slowdown to either stablecoin issuers having sufficient reserves or insufficient market demand. Regardless, the crypto market requires new capital injections to enhance prices.

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