Financial Insights That Matter
The cryptocurrency market has struggled to maintain its earlier momentum as President Donald Trump’s tariffs continue to weigh on the broader market, with all three major indexes retreating sharply from their earlier highs.
Among the cryptocurrencies, Bitcoin (BTC) has particularly taken the biggest hit, with its price plunging sharply from its all-time high. Bitcoin was hovering around $77,750 on Tuesday night after falling as low as $74,000 a day earlier. Understandably, the recent decline is a result of Trump’s tariff policies and regulatory ambiguity.
However, Bitcoin still has a lot of potential and the rally is expected to resume once the ongoing trade tensions ease and the Federal Reserve starts its interest rate cuts.
It would be ideal to adopt the buy-the-dip approach and add bitcoin-centric stocks like NVIDIA Corporation NVDA, Robinhood Markets, Inc. HOOD, Interactive Brokers Group, Inc. IBKR and to your portfolio. Each of these stocks has strong growth potential for 2025 and has seen positive earnings estimate revisions in the last 60 days.
The overall cryptocurrency market capitalization has lost more than 32% since Trump’s return to the White House in January. Year to date, Bitcoin has declined 17.2% and 24% since Trump’s second term in office. The cryptocurrency hit an all-time high of $106,533 on Dec. 22.
This came despite the Trump administration’s move with its plan to create a Strategic Bitcoin Reserve, aiming to integrate the cryptocurrency into the country’s broader economic strategy.
The recent decline comes amid fears of the economy slipping into a recession owing to Trump’s sweeping tariffs announced last week. Trump imposed a baseline 10% tariff on all trading partners of the United States. He also said that additional tariffs will be imposed on the biggest offenders.
On Tuesday, Trump imposed an additional 50% tariff on all Chinese imports in retaliation to China’s 34% tariff announcement on U.S. imports. Trump initially indicated that the tariffs may be more targeted and adjustable, suggesting that certain countries could be exempt.
However, the tariffs came as a shock to investors, with $6.2 trillion wiped out of markets in just two sessions following the announcement and the S&P 500 entering bear territory, while the Dow lost more than 1,600 points on Friday to record its worst day since the onset of the pandemic.
Bitcoin had a stellar 2024, with the final quarter proving to be one of the best in recent times as inflation continued to decline, prompting the Federal Reserve to cut interest rates by 100 basis points in total between September and December.
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