Bitcoin Braces for “Liberation Day” Tariffs as Crypto Markets Shift—XRP Funding Rate Turns Bearish
April 1, 2025 – by Arslan Butt
The cryptocurrency market has witnessed notable volatility in March, largely influenced by the aggressive trade policies of the U.S. government under President Donald Trump. As the month makes way for April, Bitcoin, the market’s leading cryptocurrency, is preparing for what has been referred to as “Liberation Day,” characterized by high tariffs impacting trade dynamics.
Market Dynamics and Presidential Influence
The recent imposition of tariffs announced by President Trump has sent ripples through global financial markets. These tariffs, which include duties of 25% on Mexican and Canadian goods, 10% on Canadian energy, and 20% on Chinese imports, have raised concerns regarding the long-term stability of the U.S. dollar as the world’s reserve currency. Larry Fink, CEO of BlackRock, echoed this sentiment in his Annual Chairman’s Letter to Investors, suggesting that rising U.S. debt could drive investors toward Bitcoin as a safer alternative to the dollar. Fink remarked, "Decentralized finance is an extraordinary invention" that could potentially undermine America’s economic advantages if investors begin to favor Bitcoin.
In parallel, the Trump family is expanding its footprint in the cryptocurrency sector. Donald Trump Jr. and Eric Trump are backing a new venture with Hut 8 to establish a major Bitcoin mining operation. This initiative is expected to significantly impact the Bitcoin mining landscape as American Bitcoin, previously known as American Data Center, takes on custodial responsibilities for Hut 8’s mining equipment.
Concerns in the DeFi Landscape
Despite positive movements from Bitcoin, the decentralized finance (DeFi) sector continues to face challenges. A significant security breach occurred on March 30, when the Ethereum-based protocol SIR.trading lost its entire total value locked (TVL) of $355,000 due to a hack targeting a vulnerable contract. This incident is part of a worrying trend, as the DeFi sector has witnessed over $22 million in losses from various security breaches in March alone.
March Review: Cryptocurrency Market Statistics
March concluded with Bitcoin trading down over 5% as uncertainty around tariff implications lingered. The turbulent market conditions, exacerbated by retaliatory tariffs from China and the European Union, contributed to increased volatility. During this period, Solana’s volume on decentralized exchanges plummeted drastically, dropping from $34 billion in January to barely exceeding $1 billion by the end of March. Similarly, the memecoin sector experienced a significant contraction, marked by a 99% decrease in revenues.
In legislative developments, two U.S. states—Utah and Kentucky—passed laws pertaining to Bitcoin, facilitating clearer definitions for digital assets and blockchain technology. Thirteen additional states have also advanced varying measures related to cryptocurrencies, with Texas proposing three bills aimed at enabling state investments in crypto and developing a blockchain pilot program.
Bitcoin’s Current Positioning
As of now, Bitcoin is priced at approximately $82,600, showing a slight recovery following its recent drop. While uncertainty persists due to trade war anxieties, the underlying market signals indicate a potential for stabilization. Bitcoin’s mining hashrate has reached all-time highs, indicating robust network security and miner confidence, while the declining exchange reserves suggest a trend of long-term holding among investors.
On-chain analysis reveals a significant addition of 22,048 Bitcoin to institutional reserves during a recent downturn, highlighting a bullish sentiment from large holders. A crucial resistance level lies between $86,700 and $88,700, with immediate attention now focused on converting the $84,000 threshold into a support foundation for a bullish trajectory.
XRP Faces Bearish Trends
On the other hand, XRP is currently trading around $2.07 after experiencing a 22% decrease from a rally peak of $2.59 following positive indicators from the SEC case involving Ripple’s CEO, Brad Garlinghouse. The funding rate for XRP has turned negative, reflecting bearish market sentiment and a significant demand for leveraged negative bets. Technical indicators suggest that XRP may encounter substantial selling pressure should it struggle to maintain support at the $2 mark, with further potential declines towards $1.77 or even $1.27. ### Conclusion
As the cryptocurrency market continues to navigate through these turbulent waters, investments in Bitcoin appear to maintain a certain degree of strength despite external pressures. Meanwhile, the bearish outlook on XRP is indicative of the ongoing challenges facing certain altcoins. Investors will undoubtedly keep a close watch on these developments as they unfold, particularly in light of ongoing economic shifts and regulatory frameworks surrounding digital assets.
Share this article:
