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On Friday, Bitcoin and many other alternative cryptocurrencies experienced a retreat, thereby reversing some of the growth they had achieved earlier in the week.

As a crypto investor, I witnessed a dip in the value of Bitcoin (BTC) today, with it dropping to $107,300 – a 4.12% decrease from its peak this week. Much like BTC, Ethereum (ETH) also took a hit, plunging by over 8% from its weekly high. Interestingly, the combined market capitalization of all cryptocurrencies apart from Bitcoin fell as well, sliding from this week’s high of $1.28 trillion to $1.19 trillion.

As cryptocurrencies experienced a significant drop in value recently, it happened simultaneously with a decline in the stock market. The futures linked to the Dow Jones, S&P 500, and Nasdaq 100 plummeted by more than 1%, marking an extension of this downward trend that started on Monday.

Bitcoin and altcoins fell amid trade concerns

As a researcher, I’m observing a trend: Bitcoin, various altcoins, and the stock market are showing signs of withdrawal following the resurgence of trade concerns. In a recent TruthSocial post, former President Donald Trump indicated that trade negotiations with the European Union have hit an impasse, and he cautioned that the U.S. may impose a 50% tariff on all goods imported from the region.

The implication was a heightening of tensions, which came as a disappointment to those involved in the market, who had been anticipating a resolution or agreement between the two allies.

Europe has implied that it may retaliate by increasing taxes on American products, such as Boeing aircraft. This week, the CEO of Ryanair issued a warning that they might cancel an order worth $33 billion for Boeing planes and switch to Airbus if Boeing’s planes face tariffs. Ryanair is one of Boeing’s largest clients.

As an analyst, I find myself reflecting on recent trade issues arising just a week after Moody’s sent ripples throughout the financial sector by reducing the U.S.’s credit rating. Simultaneously, it’s worth noting that the House of Representatives has passed the Big Beautiful Bill, which is projected to escalate the U.S.’s debt burden by more than $3.8 trillion over the next ten years.

Is this the end of the crypto bull run?

For three key reasons, it appears that the bull run in the crypto market may not be reaching its conclusion just yet. To begin with, the 50% import tax on European goods could simply be a negotiating strategy, similar to how President Trump handled tariffs on Chinese goods, which were increased to 145% before being reduced back to 30% this month.

As an analyst, I’ve observed that Bitcoin has emerged as a secure investment option, often referred to as a ‘safe haven asset’. Notably, it surpassed the stock market performance post the announcement of Liberation Day tariffs. Additionally, there has been a significant influx of funds into Bitcoin ETFs, amounting to over $8 billion since April.

The main reason Bitcoin is considered a reliable investment (safe-haven asset) lies primarily in its unique supply and demand dynamics. The demand for Bitcoin, particularly among institutions, has been steadily increasing, while the available supply on exchanges and other trading platforms has been decreasing. Over the past 16 years, Bitcoin has demonstrated its worth by growing from virtually nothing to reaching an impressive high of $111,900 this week.

3. It’s common to see fluctuations like the ones Bitcoin and other cryptocurrencies have experienced recently. For instance, Bitcoin dropped from approximately $109,300 in January to $75,000 in April, but then soared to another all-time high. In 2024, it reached a peak of $73,340 in March, only to fall to $49,390 in August before hitting yet another record high in November.

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2025-05-23 18:28