Federal Reserve Embraces Crypto as Trump Tariffs Shake Markets

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03.02.2025 41 times read 0 Comments

The Fed's Crypto Game-Changer Amid Bitcoin Volatility

According to Forbes, the Federal Reserve has made a significant announcement regarding cryptocurrency adoption. Jerome Powell, the chair of the Federal Reserve, stated that banks are now "perfectly able to serve crypto customers" provided they understand and manage associated risks effectively. This marks a stark shift from previous administrations' policies under President Biden, which were criticized for being hostile toward cryptocurrencies through initiatives like "Operation Choke Point 2.0." Under this policy, many crypto companies faced challenges accessing basic financial services.

This change comes as Donald Trump’s presidency continues to influence market dynamics significantly. Trump's administration has embraced digital assets with measures such as launching his own NFT collections and supporting a U.S.-based bitcoin stockpile initiative. However, fears surrounding potential tariffs imposed by Trump on imports from Canada (25%), Mexico (10%), and China (10%) have sparked concerns about inflationary pressures in global markets. These developments coincide with warnings from investor Robert Kiyosaki predicting possible crashes in gold, silver, and bitcoin prices due to rising debt levels.

Trump Tariffs Trigger $2 Billion Crypto Liquidation

Crypto Briefing reports that new trade tariffs announced by President Trump have caused turmoil across both traditional and digital asset markets. The newly introduced 25% tariff on Canadian and Mexican goods alongside a 10% levy on Chinese products led to widespread panic among investors over inflationary impacts. As a result of these announcements taking effect Tuesday morning at midnight EST, Bitcoin dropped sharply below $100K before settling around $92K—a three-week low—while Ethereum plunged further downwards towards $2300.

The sudden volatility wiped out approximately $1.7 billion worth of leveraged positions within just one day, according to Coinglass data analysis shared via Crypto Briefing. These insights emphasize the broader economic implications tied to ongoing global geopolitical uncertainties adversely affecting supply chains far beyond speculative trading activities.

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