Trump’s Tariffs Are CRUSHING Crypto! [Here’s Why]

Introduction to the Current Market Situation

The crypto market is experiencing a significant downturn, with Bitcoin trading under $100,000 and altcoins, especially meme coins, seeing drastic drops of up to 90%. This situation is described as an "old coin capitulation."

Impact of Tariffs on the Market

The announcement of tariffs by Trump on imports from Mexico, Canada, and China has sent the market into panic. These tariffs are part of a strategy to address the fentanyl crisis and hold these countries accountable for their promises to halt illegal immigration and the flow of drugs into the U.S.

Market Manipulation

There are concerns about market manipulation, with some suggesting that exchanges use market makers to make money on weekends when liquidity is low, leading to the flushing or liquidation hunting of tokens.

Trade War and Its Implications

The tariffs announced by Trump could lead to a trade war, with Canada and Mexico responding with their own tariffs. This scenario could increase prices due to inflation but might also lead to reduced taxes and government spending in the long term as part of Trump's economic plan.

Old Coin Capitulation

The current situation with altcoins is reminiscent of 2021, where similar predictions of no alt season were made, but the market eventually recovered. The capitulation of altcoins, with Bitcoin doing relatively better, suggests a decoupling that maximizes pain for altcoin holders.

Rune's Situation

Rune, a cross-chain swaps protocol, has experienced a capitulation event due to the addition of a lending and borrowing app that created liquidity risks. Despite a proposal being accepted to restructure debt and continue the protocol, the validators' decision to pull out poses significant risk, changing the risk-return profile of investing in Rune.

Conclusion and Future Outlook

The market is experiencing significant volatility and uncertainty due to tariffs and the potential for a trade war. While there's hope for recovery, especially considering past cycles, the current situation demands caution. The host plans to discuss whether the current bull market has reached its top in a future show.