Bitcoin (BTC) experienced a surge in volatility, climbing to 3.6% on March 19—the highest level seen since August 2024. This increase in volatility is indicative of rising market uncertainty amid various structural challenges facing the US economy, as explained by the chief revenue officer at a UK-based cryptocurrency exchange.
“The landscape of policy is becoming increasingly intricate, especially with the introduction of the initiative aimed at enhancing governmental efficiency,” the CRO noted. “While efforts to curb government expenditures enjoy bipartisan support, the wider economic repercussions—particularly concerning employment and consumer spending—are still challenging to evaluate.”
The newly formed initiative is reported to have achieved an estimated savings of $115 billion for the US government by March 19. These claimed savings include reductions in workforce, asset divestitures, cancellations of grants, and savings from regulatory changes.
The CRO further remarked that if fiscal tightening continues alongside stable or slightly decreasing interest rates, the consequent liquidity reduction may result in a conflict in policy direction, potentially undermining the stimulative impact of any future interest rate reductions.
On March 19, the Federal Open Market Committee decided to keep interest rates unchanged for the time being, although they indicated the potential for two additional rate cuts in 2025.
### Bitcoin Volatility since Trump’s Inauguration
The well-documented volatility of Bitcoin has been particularly pronounced since the inauguration of US President Donald Trump in January 2025. Following a peak of $109,590 on January 20, BTC saw a substantial 30% retracement, dropping to a low of $77,041 during the week of March 9-15. Despite increasing selling pressure as many short-term investors find themselves at a loss, there are signs that demand may be starting to return, with the cryptocurrency rebounding to approximately $84,000 at the time of this report.
The CRO emphasized that the heightened volatility suggests traders are preparing for various possible outcomes, including the tension between fiscal contractions and stable or declining interest rates.
“This situation creates a complex feedback loop where diminished government spending could hinder economic growth, potentially leading the Federal Reserve to adopt a more cautious approach or even postpone future rate cuts,” they explained.
Additionally, Bitcoin’s price fluctuations may be correlated with inconsistent policy directions. “While the Fed’s decision on interest rates offers immediate clarity, the broader fiscal landscape introduces the risk of uneven market reactions, further emphasizing Bitcoin’s responsiveness to macroeconomic conditions and changes in liquidity.”
This volatility arises as Trump has made public gestures towards the crypto sector. On March 7, he signed an executive order aimed at establishing a strategic reserve for Bitcoin and digital assets in the US. On March 20, he addressed the audience at the 2025 Digital Asset Summit, asserting that the US aims to become a “Bitcoin superpower.”
Nonetheless, Trump’s discussions surrounding tariffs and escalating geopolitical tensions are impacting financial markets as a whole, including the cryptocurrency sector.