Trump was supposed to be the crypto-friendly candidate.
But this week the crypto community found itself facing wild volatility and a sea of losses as the new US President put markets into a spin.
On Sunday night in the US, crypto markets convulsed in panic, sending some coins down as much as 20 per cent in as little as an hour.
The fear – which also infected more traditional markets – was in response to Trump’s announcement of unilateral tariffs on Canada, Mexico and China.
Bitcoin, the biggest and oldest cryptocoin, fell sharply from its recent record highs over US$100,000.
However, as the chart below shows, it recovered to be back at roughly the same price as it was seven days earlier.
Recovery was driven by a pause in tariffs.
Trump has agreed to delay the introduction of the trade taxes by 30 days in return for concessions from Mexico and Canada.
That could indicate he never intended to introduce them at all and was merely creating a bargaining chip.
It could also indicate that the market turmoil created fear in the White House.
Bitcoin price in $USD thousands. Chart: CoinMarketCap
The uncertainty over Trump’s economic plan remains acute.
Markets hate uncertainty.
And so most crypto markets have not recovered anything like as strongly as Bitcoin.
As the next chart shows, Ethereum remains down around 10 per cent compared to seven days earlier.
Bitcoin and Ethereum prices compared, price in $USD thousands. Chart: CoinMarketCap
Elon Musk’s favourite memecoin – the Shiba Inu-themed Doge coin – is down a bit more than 10 per cent, as the next chart shows.
However his boss’s new cryptocurrency has suffered still more amid the market’s fluctuations.
The newly minted Trumpcoin fell nearly 40 per cent and recovered only gently to be down about 25 per cent compared to a week earlier.
Trump and Doge coins compared, price in $USD thousands. Chart: CoinMarketCap
The rise of Trumpcoin is a marker of the power of the US President.
Is it possible the fall in its price can be seen as a mark of disapproval among a certain crypto constituency?
One possibility is the price of Trumpcoin might, over the course of his Presidential term, prove to work like a popularity poll of sorts, rising with Trump’s popularity, its falls marking his mis-steps.
The price of his wife’s memecoin ‘Official Melania Meme’ has tumbled 40 per cent from where it was a week ago and shows no sign of recovering.
Even after Trump’s apparent reversal on tariffs, a lot of eager investors are facing losses.
The cryptocurrency community is learning similar lessons to Canada: President Trump reserves the right to treat his allies and friends in the way other leaders treat enemies.
In a Trump Presidency, conventional assumptions are very risky.
It is unlikely this is the last time his whims will send crypto markets – or other markets – into wild peaks and slumps.
Author disclosure: I hold a tiny fraction of a bitcoin, worth a few thousand dollars. I’ve previously bought and sold Bitcoin and other cryptocoins, making some profits along the way and a few little losses. I’m on record as a mere speculator, not a believer.
