Total crypto market capitalization fell 30% from its peak in December 2025, down from $3.9 trillion to $2.7 trillion by April 2025. This massive decline came amidst the uncertainty in the global market caused by the new tariffs announced by President Trump on April 2. The announcement rattles investors across multiple asset classes, including cryptocurrency, and many have adopted a risk-off approach.
Bitcoin is relatively superior to other digital assets, with market advantages increasing by nearly 60%. The cryptocurrency has dropped to $74,500, but remains more resilient compared to the high-risk altcoins that have suffered much greater losses. Small tokens, NFTs, and other speculative crypto assets saw a sharp decline, reflecting the broader trends of investors seeking safer assets within the crypto ecosystem. The correlation between crypto markets and traditional stocks has become stronger in recent months, with both sectors responding in the same way as economic policy uncertainty.
As of April 6, the US stock market was also a hit, with futures on the S&P 500, Nasdaq and Dow Jones falling significantly. Bitcoin fell by more than 6% within 24 hours, while ether fell by more than 12%. At the time, the total crypto market capitalization was $2.5 trillion. Analysts say the price drop is exacerbated by low liquidity over the weekend, making the market more sensitive to large-scale selling. The Crypto Fear & Greed Index registered a score of 17, indicating extreme fear among market participants.
Despite the recession, some investors are seeing opportunities for the Bitcoin rally. Bitmex co-founder Arthur Hayes speculated that tariffs could ultimately lead to a Bitcoin breakout. The U.S. Treasury Secretary, along with other officials, has warned against further retaliation fees as current officials have already caused significant disruption in global trade. But Trump has asserted that tariffs are needed to address US trade obstacles and has already brought tens of thousands of dollars into the country.
The current market situation has brought considerable uncertainty, with many crypto assets operating poorly and traditional stock markets under pressure. The Trump administration’s decision to impose tariffs raises concerns about the future of global trade, and more than 50 countries reportedly reach out to negotiate new deals. As the situation evolves, it remains to be seen whether Bitcoin’s relative strength will continue to be retained, or whether the broader crypto market will follow traditional market performance in the face of these policy changes.