The cryptocurrency market experienced a continued decline on Friday as cautious sentiment swept over investors ahead of Donald Trump’s Liberation Day and in light of recent US inflation figures.
Bitcoin (BTC) plummeted below $84,000, representing a drop of over 5.5% from its peak this week. Numerous altcoins also took a hit, with significant downturns noted for Polygon (POL), JasmyCoin (JASMY), Bonk (BONK), and Injective (INJ), all of which dropped by more than 10%.
The primary catalyst for this market downturn was a report from the Bureau of Economic Analysis indicating an increase in US inflation during February. This sparked concerns that the Federal Reserve may adopt a more hawkish stance in its monetary policy this year. Nonetheless, a Bloomberg analyst anticipates that the Fed will swiftly lower interest rates in the latter half of the year, stating:
“With the Fed on hold for now, they’ll likely need to cut rates in the second half of the year more quickly — and likely by more — than the latest dot plot shows they anticipate.”
Moreover, Donald Trump’s Liberation Day is on the horizon. Aside from the automobile tariffs announced this week, Trump intends to impose reciprocal tariffs on both allies and adversaries.
The crypto market experienced declines despite a visit from a team associated with Musk’s Department of Government Efficiency (DOGE) to the Securities and Exchange Commission.
Trump has directed Musk to restructure various sectors of the Federal Government. According to its website, Musk’s initiative has reportedly saved taxpayers more than $130 billion.
The visit to the SEC is significant as the agency oversees the financial market, including the cryptocurrency sector. For example, it is currently investigating numerous spot crypto ETF applications from firms such as Canary, Grayscale, and Franklin Templeton.
It’s unclear what specific savings DOGE will propose to the SEC, although reports indicate that 500 employees have accepted voluntary buyout and deferred-resignation offers.
This visit follows a day after Paul Atkins faced questioning in Congress. Given Republican control, it seems likely that he will be confirmed as the next SEC Chair.
The SEC is becoming more welcoming to cryptocurrencies under Trump’s administration. It has expressed intentions to approve a range of crypto ETFs, and importantly, it has ceased pursuing legal actions against numerous crypto firms, including Coinbase, Kraken, and Uniswap.