Crypto Markets React to “Liberation Day” Tariffs, Circle’s IPO Filing, and New Bitcoin Ventures
The past week saw the cryptocurrency market experience really big ups and downs, the result of a bunch of major events happening all at once.
From President Trump’s surprise new tariffs that were announced, to revelations about the economic structure of USDC, to the Trump family’s announcement of a new Bitcoin mining operation in the U.S., these events equated to a pretty bad week for digital assets. With the market a volatile mess, Bitcoin shot up to an almost unbelievable $87,000 before backing off, and pretty much every altcoin seeing seafoam green during the recent mini-bull run got hit hard.
Market Volatility Following Tariff Announcement
One of the week’s most significant events was President Trump’s announcement of a blanket 10% tariff on all imports. The global markets were rocked, with China facing the exact hit we were told to expect, coming in at a staggering 54% tariff. It’s notable that the crypto market was sort of in flight response to this news. The initial surge that was widely reported amounted to a not really well-speculated way of saying that, in this kind of environment, people would likely turn to Bitcoin and other crypto assets as an alternative to more mainstream investments. After we got the actual breakdown of the tariffs, though—what was actually in them and who was affected—the market quickly retraced.
Bitcoin’s price had momentarily approached $87,000 as people anticipated the tariffs. But it did not hold that level and came back, finishing the week with a slight 0.89% drop, closing at $86,473 on April 2. The surge in Bitcoin’s price, then pullback, underscores the market’s volatility and sensitivity to external economic events. Although Bitcoin kept its position as the market leader, with a $1.64 trillion market cap, altcoins experienced sharper declines.
Circle’s IPO Filing and USDC’s Economic Insights
A key spotlight from the week was from Circle, the issuer of the stablecoin USDC. Circle’s S-1 filing gave some much-needed economic insight into how the company makes its money. They pulled in a staggering $1.7 billion in revenue in 2022, and would you believe that 99% of it was tied to Treasury securities? That’s a lot of UST growing fat in your private bank. Circle’s S-1 detail also pointed out a risk that is unfurling for a lot of our banking system, private and public. A fall of just 1% in rates, and they’d be looking at a $441 million income decrease. And we pay no mind at all to that risk. What do you think?
The court documents also show major crypto firms raking in cash from Circle. In total, Circle dished out more than $1.3 billion in 2021 and 2022 to some of the most important players in the crypto ecosystem. That number was certainly an eye-popper to us. These payments underscore the pivotal role that exchanges and other such firms play in the push for stablecoins and in stablecoin liquidity, at least as far as Circle is concerned.
Major Bitcoin Purchases and New Mining Ventures
In other significant news, major players in the world of cryptocurrency kept amassing Bitcoin in large quantities. One prominent institutional investor, called Strategy, added 22,048 Bitcoins (worth approximately $1.9 billion) to its bag, now totaling over 528,000 Bitcoins and constituting about 2% of the total Bitcoin supply. Even the stablecoin issuer Tether got in on the act, buying 8,888 Bitcoins (worth about $735 million) in Q1.
At the same time, the Trump family was grabbing attention by hewing to a new path—establishing American Bitcoin Corp—a new Bitcoin mining venture led by boys Don Jr. and Eric in collab with Hut 8 Corp, one of the biggest players in the Bitcoin mining game. American Bitcoin Corp, then, is positioning itself to become the biggest player—turns out, mining is quite a profitable business. And when the mining operation plans for $160 million worth of energy each year and 8,000 mining rigs crunching numbers at lightning speed, well, it turns out, tunneling for Bitcoin is a serious inflation hedge. You can read more about it here.
Broader Market Declines and Sector Performance
The total market cap for all cryptocurrencies has decreased over the last week. It fell from $2.82 trillion to $2.64 trillion, which is a 6.4% drop. Bitcoin, for its part, didn’t fall anywhere near as much as many cryptocurrencies did. Its dominance in the market, which was 60.7% last week, rose to 62.1% today. In the losses suffering by the wider crypto market, it’s clear that altcoins are the biggest losers.
Among the top crypto assets, altcoins such as Avalanche (AVAX), Chainlink (LINK), Dogecoin (DOGE), and XRP sustained the largest drops, with AVAX plummeting 12%, LINK nosediving 10%, DOGE spiraling down 9.46%, and XRP sinking 8.43%. Nevertheless, TRON (TRX) stood out as the sole asset on the gainers’ list, managing a 1.98% uptick in its price. The metaverse sector, which has already been under pressure for some time, sustained probably the heaviest blows, with prices of assets in this space falling by around 18%. When it comes to the other sectors, the same story largely holds true, with blockchain utility prices down about 17% and application utility prices in this space pretty close behind with declines of around 16%.
1/6 NEW Weekly Coin Metrics State of the Market Report:
Markets reacted sharply to “Liberation Day” tariffs from President Trump, as Bitcoin briefly surged to $87K before retracing. Meanwhile, @Circle’s IPO filing gave rare insight into $USDC’s economics, and Trump Jr. launched… pic.twitter.com/PxLVzHvNGY
— CoinMetrics.io (@coinmetrics) April 3, 2025
Lower Wallet Activity and Mixed Liquidations
When it comes to on-chain activities, however, the largest cryptocurrencies did not see increases. CoinMetrics tracked a decrease in wallet transactions across many blockchain networks. The most significant increase in wallet activity was for FTT, which saw a 24.66% rise. Meanwhile, CoinMetrics noted increases in wallets for LINK and ADA. Overall, though, Bitcoin’s blockchain saw 1.16% fewer wallet transactions during the period studied; XRP’s blockchain saw 10.77% fewer; and Ethereum’s 11.45% decrease in wallet transactions meant a decline for it as well.
Liquidation data was mixed, with both long and short positions experiencing volatility. The volatility across the market continues to impact traders, as sudden price shifts lead to liquidations in both directions. This volatility, combined with the external economic pressures like the new tariffs and ongoing macroeconomic challenges, is contributing to a climate of uncertainty within the crypto markets.
Conclusion
The week gone by has been stormy in the cryptocurrency markets, buffeted by several breezy geopolitical events, fresh economic insights from Circle, and some not-so-subtle institutional interest in Bitcoin. The broader market had a down week, but Bitcoin’s dominance keeps strengthening, with some very big players making some very strategic moves when it comes to both holdings and investments in mining operations.
If the current turbulent market conditions weren’t enough of a test for the crypto space, stablecoins, large institutions, and mining operations will be put under the microscope. Will the future of the crypto space be more like the past week, or will it stabilize? If so, when?
Disclosure: This is not trading or investment advice. Always do your research before buying any Metaverse crypto coins.
