Crypto Market Plunges Amid US Inflation Fears and Trump’s Liberation Day
The crypto market took a hit on Friday,with Bitcoin (BTC) dipping below $84,000,a 5.5% drop from its recent peak. This decline was part of a broader sell-off,driven by a risk-off sentiment ahead of Donald Trump’s Liberation Day and following the release of strong US inflation data.
Altcoins also suffered, with Polygon (POL), JasmyCoin (JASMY), Bonk (BONK), and Injective (INJ) seeing losses exceeding 10%. The main catalyst for this downturn was a report from the Bureau of Economic Analysis, which showed a rise in US inflation in February. This data increased the likelihood of the Federal Reserve adopting a more hawkish stance this year.
However, a bloomberg analyst predicts that the Fed will need to cut rates more rapidly in the second half of the year.The analyst stated, “With the Fed on hold for now, they’ll likely need to cut rates in the second half of the year more quickly — and likely by more — than the latest dot plot shows they anticipate.”
Adding to the market’s woes, Trump’s Liberation day is approaching, and he has announced plans for reciprocal tariffs on both allies and foes.Simultaneously occurring, a team from Elon Musk’s Department of Government Efficiency (DOGE) visited the Securities and Exchange Commission (SEC). Musk’s initiative has reportedly saved taxpayers over $130 billion.
DOGE’s visit to the SEC is important because the agency oversees the financial market, including crypto. The SEC is currently reviewing numerous spot crypto ETF filings from companies like Canary,Grayscale,and Franklin Templeton. While it’s unclear what savings DOGE will propose, data shows that 500 SEC workers have accepted voluntary buyouts.
Following Paul Atkins’ congressional hearing, the odds are high that he will be approved as the next SEC Chair under Republican control. The SEC has become more crypto-friendly under Trump, hinting at potential approvals for many crypto ETFs and ending legal battles with companies like Coinbase, Kraken, and Uniswap.
