Bitcoin, Ethereum, the technology-rich S&P 500 and Japan’s Japan 225 all recorded their worst quarterly performance in over three years, reflecting a wider market slump.
The pessimistic market mood comes from changes in global trade policy expected today as President Donald Trump announces new tariffs to many of his trading partners in a speech at Rose Garden at 10pm (UTC+3). Analysts are divided on whether these economic measures are applied to each other or a soft approach is adopted.
“This decision could go either way,” said Sid Powell, CEO of Maple Finance. Powell pointed out that soft stances such as a 10% tariff instead of the feared 25% could lead to dangerous gatherings in the crypto market.
Nansen research analyst Nikolai Sondergaard suggested that the second quarter of 2025 could still follow historic seasonal trends, depending on Trump’s final tariff strategy. “The tariff fear, which has been pushing for risk-offs lately, appears to be approaching local peaks,” Sondergaard said.
Sondergaard added that the progressive shift in the US administration from April to June suggests that a progressive shift towards a more bilateral negotiation-oriented approach would be unlikely to have a full trade war. However, the ongoing disruption over country-specific tariff proposals can keep the market volatile in the short term.
Investors initially expected at least two interest rate cuts in 2025, based on the signal from the Fed’s March 19 FOMC meeting. However, Trump’s trade policy has been added to uncertainty, delaying clear guidance from the central bank. “The Fed has adopted a ‘wait’ stance,” explained Sondergard. “President Powell has made it clear that sentiment alone does not determine interest rate cuts, and that only difficult economic data, particularly labour market indicators, will drive policy changes.”
He also noted that the Treasury’s Quantitative Tightening (QT) has slowed down due to the tough situation in the money market, but this does not indicate that the Fed will be completely interrupted.
Maple Finance’s Powell reflects these concerns and says the Fed’s monetary policy will be a key factor in determining whether the crypto market will be easier in the second quarter. “If Trump’s ‘flexible’ tariff rhetoric leads to lighter policies on April 2nd, the market could sigh with low relief,” Powell said. “However, liquidity remains tight and the US dollar remains strong. Without a significant macroeconomic catalyst, such as a CPI reduced to unemployment claims of less than 2.5%, the potential recovery for BTC would be limited to $100,000, and the market could experience a choppy, slow recovery.”
*This is not investment advice.
