TOTAL Crypto Market. Games with the 800-Pound Gorilla. Series IIOver the 4 months since Donald Trump’s inauguration in January 2025, his administration’s policies have had a complex and in many ways negative impact on cryptocurrency markets, despite the overall pro-crypto agenda.
Short-Term Market Volatility Due to Tariff Policy
One of the most significant negative impacts has been caused by Trump’s aggressive tariff policy. The announcement and subsequent implementation of new tariffs sent shock waves through global financial markets, including cryptocurrencies.
The immediate effect has been increased volatility, with Bitcoin down a third from its highs, Ethereum and many other major coins also falling by more than half, and crypto futures seeing liquidations of over $450 million in a single day.
This turbulence was not isolated — experts noted that broader “risk aversion,” in which investors flee volatile assets for safer havens like gold, led to sharp declines in both the stock and crypto markets.
Uncertainty around tariffs — particularly reciprocal tariffs affecting up to 25 countries — created short-term headwinds for cryptocurrencies. As institutional and foreign investors pulled billions out of U.S. stocks, the resulting market volatility spilled over to cryptocurrency, which remains closely tied to tech indexes like the NASDAQ. This risk aversion delayed potential rallies and led to a volatile, unpredictable trading environment.
Regulatory Rollbacks and Market Integrity Concerns
The Trump administration has aggressively rolled back regulatory oversight in an attempt to create a more crypto-friendly environment. Key steps include disbanding the Justice Department’s National Cryptocurrency Enforcement Team (NCET), appointing pro-crypto officials to regulatory bodies, and directing agencies to streamline or repeal existing crypto regulations. While these actions have reduced the compliance burden on crypto businesses and spurred innovation, they have also raised serious concerns about the integrity of the market.
Critics argue that loosening oversight increases the risks of money laundering, fraud, and illegal transactions, which could undermine investor protections and the overall reputation of U.S. crypto markets.
Consumer advocacy groups warn that rapid deregulation could encourage abuse and undermine trust, especially since the Trump administration has also banned the development of a U.S. central bank digital currency (CBDC), setting the U.S. apart from other major economies pursuing digital currency initiatives.
Conflicts of Interest and Ethical Controversies
Another negative impact has been the perception — if not the reality — of conflicts of interest and ethical dilemmas. The Trump family’s direct involvement in crypto projects, including the launch of a stablecoin and investments in mining, has fueled suspicions of market manipulation and blurred the lines between personal and presidential interests.
Such controversies have further undermined investor confidence and contributed to a sense of unpredictability in regulatory and market outcomes.
Summary Table: Key Negative Impacts
Policy/Action =>> Negative impact on crypto markets
Rising Tariffs and Trade Uncertainty =>> Increased volatility, risk aversion, falling prices.
Regulatory Rollbacks/NCET Dissolution =>> Weakened oversight, higher risk of fraud and abuse.
CBDC Development Ban =>> US Lagging Global Digital Currency Innovation
Trump Family’s Direct Involvement in Crypto =>> Alleged Conflicts of Interest, Market Manipulation Concerns.
Technical Challenge
The technical picture in the main crypto market cap chart CRYPTOCAP:TOTAL points to the end of the recovery period, reaching a key resistance near the $3.5 trillion mark.
Conclusion
While the Trump administration has promoted a more liberal environment for crypto innovation, the last four months have seen significant negative effects: increased market volatility due to tariff policy, increased risk due to deregulation, and growing concerns about conflicts of interest.
These factors have combined to create an atmosphere of uncertainty and skepticism, which is undermining the stability and trust in the US crypto markets in the short term.
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Best wishes,
@PandorraResearch Team 😎
