Bitcoin and cryptocurrency prices have taken a significant hit this week, as traders react to the escalating economic turmoil resulting from U.S. President Donald Trump’s recent tariff policies. The uncertainty in the market has led to fears of a potential bitcoin price crisis, reminiscent of the infamous "Black Monday" stock market crash of 1987. As a result, Bitcoin fell sharply to a near one-month low, marking a continued decline that has left investors on edge.
On April 7, 2025, Bitcoin dropped as much as 8.6%, reaching $75,867 by 05:22 ET (09:22 GMT) — its lowest level since November 2024. The cryptocurrency market as a whole has seen a staggering $500 billion wiped off its total capitalization since last week, driven by a broader risk aversion among investors.
Global equity markets have not fared any better, suffering losses of approximately $4 trillion since Trump announced steep trade tariffs. This has sparked a wave of panic among traders, many of whom have begun to move their assets to safer havens such as gold and the Japanese yen. Speculative assets like cryptocurrencies have been particularly hard hit.
In a surprising twist, U.S. Treasury Secretary Scott Bessent has publicly endorsed Bitcoin, which could signal a shift in the government’s stance on digital currencies. However, BlackRock’s chief executive has issued a stark warning to the U.S. dollar, estimating potential losses nearing $1 trillion if the current economic climate continues.
Arthur Wilmarth, a professor emeritus of law at George Washington University, emphasized the gravity of the situation, stating, "This is an existential threat to the banking industry, as well as to the financial system writ large," adding that taxpayers could ultimately bear the brunt of any fallout.
In the face of this turmoil, Congress is racing to pass significant new legislation regarding stablecoins, which are digital currencies pegged to traditional assets like the U.S. dollar. Bo Hines, who leads Trump’s Council of Advisers on Digital Assets, mentioned last month that the White House aims to have a stablecoin bill passed before August. This legislation could allow interest payments to holders of dollar-pegged cryptocurrencies, a move that many see as a game-changer for the financial landscape.
However, the current stablecoin bill headed to the House floor prohibits issuers from paying interest, while a Senate bill excludes interest on certain types of stablecoins but does not outright ban them. As lawmakers work to reconcile these bills, the future of stablecoins hangs in the balance. Hina Sattar Joshi, digital assets sales director at TP ICAP, noted that stablecoins are emerging as the first real blockchain use case to integrate into traditional finance, suggesting that they could play a pivotal role in the evolving financial ecosystem.
Amidst the chaos, Coinbase chief executive Brian Armstrong took to social media platform X to advocate for both banks and crypto companies to be allowed to share interest with consumers. His statement reflects a growing sentiment among industry leaders that both sectors should be incentivized equally.
The stablecoin market has seen rapid growth, with Tether’s USDT leading the charge at a valuation of $144 billion. Tether reported a remarkable $13 billion in profit for 2024, largely due to its holdings of Bitcoin, gold, U.S. Treasury bonds, and other financial instruments. Bank of America chief executive Brian Moynihan has also hinted at entering the stablecoin business, stating, "If they make that legal, we’ll go into that business." This highlights the increasing interest from traditional financial institutions in the crypto space.
As the market reacts to these developments, traders are closely monitoring Bitcoin’s performance and the potential for a "Black Monday" event, which could see further declines in both cryptocurrency and stock markets. Nearly $160 million worth of Bitcoin has recently been moved onto the Kraken exchange, raising concerns that a major holder, or "whale," may be preparing to sell.
In the broader crypto landscape, other cryptocurrencies have also suffered significant losses. Ethereum, the second-largest cryptocurrency by market cap, fell over 17% to $1,485.59, marking its weakest point since March 2023. XRP sank 16.5% to $1.75, while popular tokens like Solana, Cardano, and Polygon saw declines ranging from 14% to 17%. Even meme tokens like Dogecoin and $TRUMP faced steep drops, with Dogecoin falling nearly 17% and $TRUMP hitting a record low of $7.57.
Petr Kozyakov, co-founder and CEO of Mercuryo, commented on the shifting dynamics in the market, noting that the proportion of stablecoins in weekly transactions on the Mercuryo platform has risen from about 37% in January to around 50% in March. This indicates a growing preference among traders for stablecoins amid increasing uncertainty.
As the situation continues to evolve, the future of Bitcoin and the broader cryptocurrency market remains uncertain. With potential legislative changes on the horizon and ongoing economic pressures, traders and investors alike are left to weigh their options in a rapidly changing landscape.
