Key Takeaways
- Bitcoin and altcoins plunge amid growing economic uncertainty.
- Market reactions remain tepid as the Strategic Bitcoin Reserve will not involve new government purchases for now.
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Fears of a looming recession, coupled with escalating trade tensions between the US and Canada, triggered Bitcoin price drops and altcoin sell-offs on Sunday night.
Speaking on Fox News’ Sunday Morning Futures, Trump avoided directly addressing recession possibilities in 2025, saying he hated predicting “things like that.” He emphasized his economic policies aim to bring wealth back to America, though the transition may take time.
Trump’s tariffs on imports from countries like Canada, Mexico, and China have been a source of market volatility. Despite this, the US President defended his approach as necessary for achieving his economic goals.
Also on March 9, Mark Carney, a former governor of the Bank of Canada, won the Liberal Party leadership election, replacing Justin Trudeau as Canada’s prime minister.
The new prime minister-elect went off on Trump in his first speech, stating that Trump won’t succeed in his trade war with Canada.
“America is not Canada. And Canada never, ever, will be part of America in any way, shape or form,” Carney said. Trump has repeatedly referred to Trudeau as the “Governor” of Canada, suggesting that Canada would be better off as the 51st U.S. state.
“My government will keep our tariffs on until the Americans show us respect,” he said. Canada has imposed 25% tariffs on US consumer goods in retaliation to Trump’s tariffs.
Bitcoin fell below $81,000 following Carney’s victory, according to CoinGecko data. At press time, BTC recovered slightly above $82,000, down 4% in the last 24 hours.
Market turmoil deepened as Bitcoin declined. Ether and XRP each shed more than 6%, while Dogecoin dropped over 10%.
Other top coins like BNB, Solana, Cardano, and TRON also saw significant losses, while lower-cap tokens such as Injective, Maker, and Render experienced double-digit drops.
The total crypto market capitalization decreased 6% to $2.8 trillion within a day. Leveraged liquidations reached $600 million, with approximately $530 million in long positions eliminated, according to Coinglass data.
The Atlanta Federal Reserve’s GDPNow model has revised its forecast for the first quarter of 2025, predicting a GDP contraction of 2.4%. This downward revision reflects weaker-than-expected consumer spending and a widening trade deficit, raising concerns about a potential recession.
Market reaction to Trump’s Bitcoin reserve: A mixed bag
The market turbulence continued after Trump’s Thursday executive order establishing a Strategic Bitcoin Reserve, which initially sparked selling pressure due to limited details about funding beyond existing US-held Bitcoin.
US Treasury Secretary Scott Bessent said Friday that discussions are underway about additional BTC acquisitions, but the first step is to halt the sale of seized Bitcoin.
He also noted that while the current focus is on Bitcoin, the broader strategy is to establish a comprehensive crypto reserve.
While some analysts view the reserve’s creation as formal recognition of Bitcoin’s role as a strategic asset, positioning it alongside traditional reserves like gold, this recognition has not translated into immediate market confidence.
Crypto community members also had mixed reactions to the White House Crypto Summit held after the executive order.
Speaking at the event, Chainlink co-founder Sergey Nazarov expressed optimism that US officials are now actively engaging with the blockchain and crypto industry, which he believes could help the country stay at the forefront of financial innovation.
“Me and other people in the room do believe that the crypto, blockchain, Web3 infrastructure is the next iteration of the financial system,” Nazarov said. “And I think that the US should have its leadership position continue in that new financial system.”
Multicoin Capital managing partner Kyle Samani also viewed the event positively, labeling it a “historic moment” for crypto.
In contrast, Coin Bureau CEO Nic Puckrin and Bitcoin maximalist Justin Bechler expressed disappointment, questioning the summit’s impact and criticizing its approach.
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