Trump’s policy games are starting to catch up with crypto and stock markets

Global financial markets are reacting to President Donald Trump’s latest economic decisions, with stocks tumbling in Asia, Treasury yields hitting two-month lows, and Bitcoin crashing below $90,000.

Investors are scrambling after the White House confirmed new tariffs on Canada and Mexico on Monday, as well as additional restrictions on Chinese investment in US markets. The pressure is also mounting as Elon Musk’s Department of Government Efficiency (D.O.G.E) cuts federal jobs, raising concerns over economic stability and interest rate expectations especially among Democrats.

Bitcoin plunged 5% to $88,790, touching a low of $87,736 before stabilizing. The dip wiped out nearly 20% of gains made since Trump’s re-election, pulling crypto-exposed stocks down with it. MicroStrategy dropped 6.2%, and Coinbase fell 5.4%.

Bitcoin’s $90,000 price level had been a major support zone since November, but the latest breakdown could lead to an even bigger pullback.

“If Bitcoin breaks below $90,000 in a meaningful way, we could see a move toward the $70,000–$75,000 range,” Analyst Joel Kruger of LMAX warned. “There’s still strong demand down there, but the market is watching closely.” Ether and Solana’s SOL each dropped 9%, and the CoinDesk 20 index slid more than 8%.

Trump’s actions have stopped generating positive market movements

The downturn comes just four weeks after Trump’s executive order on crypto regulation, which received a mixed to flat reaction from the industry. While the order left room for a potential US Bitcoin reserve, it lacked the immediate, high-impact policy changes that traders had been hoping for based on Trump’s campaign promises.

The president has been playing games with US international policy as he aligns his goals with the controversial Russian president Vladimir Putin amid negotiations of a Ukraine truce and a trade deal between America and Russia.

During his campaign, Trump promised to fix the US-Russia relationship and end the Ukraine war as quickly as possible. However, all signs point to Putin holding all the cards in the truce negotiations, with Ukraine’s president Volodymyr Zelenskyy publicly slamming Putin and Trump for shutting him out.

As part of his devices, Trump has also ordered Zelenskyy to just straight up pay all the money America sent Ukraine for aid, which is in the hundreds of billions of dollars. Zelenskyy has said Ukraine wouldn’t pay a dime, because in his words, “it wasn’t a loan.”

As a side jab, Trump called Canada’s Prime Minister Justin Trudeau “Governor Trudeau” in a Truth Social post that announced his economic partnership with Putin.

Stock market is dragging crypto down with it

“Equities have faced a few difficult sessions over the last week, with top-performing stocks down many times the index, as markets grapple with increased uncertainty under the new administration,” said Steven Lubka, head of private clients at Swan Bitcoin. “This pressure has spilled over into Bitcoin and crypto markets.”

The S&P 500 is on a three-day losing streak, struggling to recover from last week’s sell-off caused by economic slowdown fears. Investors are watching the 10-year Treasury yield, which Trump’s team is now closely tracking as a key indicator of economic health.

Treasury Secretary Scott Bessent is attempting to lower borrowing costs, echoing Bill Clinton’s 1990s economic playbook. But despite US Treasuries outperforming similar interest-rate swaps, the broader market is waiting for actual results before making big bets.

Cryptopolitan Academy: Coming Soon - A New Way to Earn Passive Income with DeFi in 2025. Learn More