After remaining steady in the lead up to President Donald Trump’s declaration of widespread tariffs, cryptocurrencies like Bitcoin joined the global market sell-off on tariff-fueled trade wars and recession fears.
The price of bitcoin, the most popular cryptocurrency on the market, according to BankRate, dropped 6.93% from last Friday to just above $74,000 in early morning trading Monday before rebounding to above $78,000 by end of day. Bitcoin had traded at more than $100,000 toward the end of January, according to Yahoo Finance. Prices were down to $76,700 in after hours trading Tuesday.
Trump has promoted the crypto industry. Still, prices have steadily declined since his inauguration.
While many cryptocurrency investors and enthusiasts had hoped crypto would serve as a hedge against global market forces, Monday’s price declines showed the trading market for digital currency to be just as vulnerable. Still, some Long Island crypto proponents said the recent declines are a temporary setback for a market that is primed to become widely adopted.
“Bitcoin is still at around $80,000 which not too long ago was a dream,” said Craig Rudes, a partner at Long Island Blockchain, a technical consulting firm for blockchain technology. Bitcoin prices peaked at $104,669 on Jan. 25.
Cryptocurrency is a digital currency secured by cryptography, safeguarding it against counterfeiting. Crypto is hosted on decentralized computer networks using blockchain technology, according to Investopedia.
While there is currently no “defined regulation” used to regulate crypto in the U.S. yet, legislation introduced last year seeks to bring cohesive regulation to the landscape, according to Reuters.
On Tuesday, The Associated Press reported that the Justice Department is disbanding a team of prosecutors who targeted cryptocurrency crimes and is shifting its focus away from complex crypto-related cases involving banking and securities law, according to a memo reviewed by The Associated Press.
However, some Long Island financial advisers like Mitchell O. Goldberg, president of Melville-based financial advisory firm ClientFirst Strategy Inc., said the value of crypto is not substantiated.
“It’s hocus pocus,” said Goldberg, who doesn’t advise on crypto investments for his clients. “I don’t think there’s anything that backs it up. It’s not a true asset.”
Here are four things to know about the cryptocurrency market amid broader market fears of a recession.
“Typically, when we see a strong market pullback in the traditional finance world, crypto usually mirrors that,” said Nick Selvaggio, partner at Long Island Blockchain. “If we see the S&P dropping like crazy, Bitcoin tends to drop like crazy, as well.”
Selvaggio, however, said the impact of markets tends to be more exaggerated with crypto markets.
“Whatever the Nasdaq does, or the S&P does, it does a magnified version of that,” Goldberg said. On March 11, for example, the S&P 500 fell 0.8% after falling as much as 1.5%. The price of bitcoin that same day fell 3.17%, bringing it below $80,000.
While the price of bitcoin has mirrored the U.S. stock market, there was a noticeable divergence between crypto prices and traditional markets last week, at least for a few days, Selvaggio said.
After Trump on April 2 announced a 10% base tariffs on all imports to the United States, “the overall market pulled back and we saw Ethereum and Bitcoin holding steady,” he said.
However, news of declines in Asian markets days later triggered price declines in bitcoin, as well as currencies like Ethereum, XRP, and Solana. On Monday, stocks in Hong Kong fell 13.2% for their worst day since 1997, and while it improved slightly Tuesday, prices remain 13% lower than they were last week.
“The beautiful thing about cryptocurrencies is they are borderless,” Rudes said.
As a result, they can be free from national manipulation, he said.
“As turbulence continues, Bitcoin will be looked at…as less risky,” Rudes said. “The fact that it’s a global trade currency means it has value.”
Financial advisers like Goldberg though caution against using crypto as a hedge against economic woes, or as a way to make up for lack of retirement savings.
Selvaggio, who is not a financial adviser, said it’s important for those not already in the crypto market to understand that “it’s the riskiest asset class on the planet still.”
After remaining steady in the lead up to President Donald Trump’s declaration of widespread tariffs, cryptocurrencies like Bitcoin joined the global market sell-off on tariff-fueled trade wars and recession fears.
The price of bitcoin, the most popular cryptocurrency on the market, according to BankRate, dropped 6.93% from last Friday to just above $74,000 in early morning trading Monday before rebounding to above $78,000 by end of day. Bitcoin had traded at more than $100,000 toward the end of January, according to Yahoo Finance. Prices were down to $76,700 in after hours trading Tuesday.
Trump has promoted the crypto industry. Still, prices have steadily declined since his inauguration.
While many cryptocurrency investors and enthusiasts had hoped crypto would serve as a hedge against global market forces, Monday’s price declines showed the trading market for digital currency to be just as vulnerable. Still, some Long Island crypto proponents said the recent declines are a temporary setback for a market that is primed to become widely adopted.
“Bitcoin is still at around $80,000 which not too long ago was a dream,” said Craig Rudes, a partner at Long Island Blockchain, a technical consulting firm for blockchain technology. Bitcoin prices peaked at $104,669 on Jan. 25.
Cryptocurrency is a digital currency secured by cryptography, safeguarding it against counterfeiting. Crypto is hosted on decentralized computer networks using blockchain technology, according to Investopedia.
While there is currently no “defined regulation” used to regulate crypto in the U.S. yet, legislation introduced last year seeks to bring cohesive regulation to the landscape, according to Reuters.
On Tuesday, The Associated Press reported that the Justice Department is disbanding a team of prosecutors who targeted cryptocurrency crimes and is shifting its focus away from complex crypto-related cases involving banking and securities law, according to a memo reviewed by The Associated Press.
However, some Long Island financial advisers like Mitchell O. Goldberg, president of Melville-based financial advisory firm ClientFirst Strategy Inc., said the value of crypto is not substantiated.
“It’s hocus pocus,” said Goldberg, who doesn’t advise on crypto investments for his clients. “I don’t think there’s anything that backs it up. It’s not a true asset.”
Here are four things to know about the cryptocurrency market amid broader market fears of a recession.
How connected to the traditional investment market is crypto?
“Typically, when we see a strong market pullback in the traditional finance world, crypto usually mirrors that,” said Nick Selvaggio, partner at Long Island Blockchain. “If we see the S&P dropping like crazy, Bitcoin tends to drop like crazy, as well.”
Selvaggio, however, said the impact of markets tends to be more exaggerated with crypto markets.
“Whatever the Nasdaq does, or the S&P does, it does a magnified version of that,” Goldberg said. On March 11, for example, the S&P 500 fell 0.8% after falling as much as 1.5%. The price of bitcoin that same day fell 3.17%, bringing it below $80,000.
What led to Monday’s drop in crypto pricing?
While the price of bitcoin has mirrored the U.S. stock market, there was a noticeable divergence between crypto prices and traditional markets last week, at least for a few days, Selvaggio said.
After Trump on April 2 announced a 10% base tariffs on all imports to the United States, “the overall market pulled back and we saw Ethereum and Bitcoin holding steady,” he said.
However, news of declines in Asian markets days later triggered price declines in bitcoin, as well as currencies like Ethereum, XRP, and Solana. On Monday, stocks in Hong Kong fell 13.2% for their worst day since 1997, and while it improved slightly Tuesday, prices remain 13% lower than they were last week.
Why is cryptocurrency considered a safe haven investment?
“The beautiful thing about cryptocurrencies is they are borderless,” Rudes said.
As a result, they can be free from national manipulation, he said.
“As turbulence continues, Bitcoin will be looked at…as less risky,” Rudes said. “The fact that it’s a global trade currency means it has value.”
Financial advisers like Goldberg though caution against using crypto as a hedge against economic woes, or as a way to make up for lack of retirement savings.
What should owners or potential investors of cryptocurrency consider doing?
Selvaggio, who is not a financial adviser, said it’s important for those not already in the crypto market to understand that “it’s the riskiest asset class on the planet still.”