Due to fear, there is a crash from $83k to $76k in the crypto market because of ongoing wars, supply chain disturbance and Donald Trump’s tariff war, which are supposed to bring about an economic downturn in the global Markets.
Main Takeaways:-
- There is an indication by Donald Trump that the market will see an economic downturn in 2025.
- Economic downturn worries caused Bitcoin to collapse to $76k levels.
- Even after some time, the price will be restored soon, and Bitcoin was trading at $83k at publication time.
- The US Federal Reserve could reduce the rate of the economic downturn which will provide a respite rally in the crypto markets.
Donald Trump Suggests At Economic Downturn in Q1 and Q2 2025
In an interview with Fox, Donald Trump ignored a clear-cut answer when he was asked: Are you anticipating an economic downturn this year?
To which he replied:-
I dislike predictions such as that. Because what we are doing is excellent. We are providing assets back to America. It’s a great thing, and there are constant phases of economic downturn. It takes a short time. It will be excellent in the end.
Factors That Could Bring a Potential Economic Downturn in the Crypto Markets
Donald Trump Tariff War:
Donald Trump has warned that he will put extra taxes on China, India, Mexico and other countries because of what he calls “unfair trade practices”.
A major part of global trade is provided by these countries, together with the USA.
Global Crackdown on Cryptocurrencies
According to the reports above, 30% of countries have been facing a global Crackdown on Cryptocurrencies, like France, Italy, and India, enforcing high tariffs, and the two largest economies, Russia and China, have mostly prohibited crypto.
The Absence of Liquidity in Crypto Markets
Due to higher inflation, the US Fed suggested in December 2024 that it would be extremely challenging to increase the interest rate. According to the reports, the last calculations by the Fed hint that it will be nearly 2.5% to 2.9% throughout the year, and February’s inflation statistics are projected to be approximately 3% higher than the Fed’s last calculations.
At present cutting the rates would get more money into the economy, which can increase inflation.
War in Ukraine and the Middle East
In between the war in Ukraine, the US government provided $65 billion worth of funds and tools to the Ukrainian government. Because of this increased government spending, in addition to the surplus spending by the US AID, causes a rise in inflation in the US Dollar.
According to the reports, the war has also created a disturbance in the supply of wheat, edible oil and many other minerals that both Ukraine and Russia used to deliver to other countries. For example, the war has harmed 30% of the global wheat supply and more than 10% share if the global crude oil supply has been affected by this war.
Disclaimer: We at Bitcoinik.com present you with the latest information in the crypto market. However, this information should not be regarded as financial advice and viewers should consult their financial advisors before investing.
