Cryptocurrency Firms Feel the Heat from US Tariffs

Market Turbulence Sent Share Prices Tumbling and Foiled Initial Public Offering Plans

Cryptocurrency firms felt the heat from US President Donald Trump’s sweeping tariff rollout this week as market turbulence sent share prices tumbling and foiled initial public offering (IPO) plans.

From exchanges to Bitcoin (BTC) miners, crypto stocks suffered as much, if not more, than shares of other companies — despite the industry’s warm relationship with the US president.

On April 2, Trump announced he was placing tariffs of at least 10% on practically all imports into the United States and adding additional “reciprocal” tariffs on some 57 countries.

Since then, major US stock indices — including the S&P 500 and Nasdaq — tumbled by roughly 10% as traders braced for a looming trade war.

Sharp Selloffs

Crypto exchange Coinbase — a prominent ally of Trump during the November US elections — experienced a similarly severe sell-off, with its stock price dropping by roughly 12% during the same period, according to data from Google Finance.

Bitcoin miners are also taking a hit. The CoinShares Crypto Miners ETF (WGMI) — which tracks a diverse basket of Bitcoin mining stocks — has lost roughly 13% of its value since immediately prior to Trump’s April 2 announcement, according to data from Morningstar.

Even Strategy, one of the best-performing stocks of 2024, wasn’t immune. Its share price has fallen by around 6% on the news, Google Finance data showed.

IPO Delays

The impact of US tariffs hasn’t been limited to stock price volatility. Stablecoin issuer Circle has reportedly paused plans for a 2025 IPO, citing market turbulence.

According to The Wall Street Journal, Circle is “waiting anxiously” before taking further steps after filing to take the company public on April 1.

It is among several companies — including fintech Klarna and ticketing service StubHub — reportedly considering altering or shelving IPO plans.

Decoupling from the Broader Market

One exception may be Bitcoin itself, which some analysts say is finally “decoupling” from the broader market.

Bitcoin’s spot price has held above $82,000 this week, even as US equities markets collapsed.

Conclusion

The impact of US tariffs on cryptocurrency firms is a stark reminder of the volatile nature of the market and the potential risks associated with investing in the industry.

As the global economic outlook remains uncertain, investors and companies alike will need to remain vigilant and adapt to changing market conditions.

FAQs

Q: What are the implications of the US tariffs on cryptocurrency firms?

A: The tariffs have caused significant market turbulence, leading to sharp selloffs in cryptocurrency stocks and potentially foiling initial public offering plans.

Q: Which companies have been affected by the market turbulence?

A: Coinbase, Bitcoin miners, and Even Strategy have all experienced significant drops in their stock prices, while stablecoin issuer Circle has reportedly paused plans for a 2025 IPO.

Q: What is the current state of the global economic outlook?

A: Investment bank JPMorgan has raised its estimated odds of a global economic recession in 2025 to 60% from 40% previously, citing the potential for “disruptive U.S. policies” and “tariff retaliation.”

Q: What is the outlook for Bitcoin in the current market conditions?

A: Some analysts believe that Bitcoin is “decoupling” from the broader market and holding its value, despite the market turbulence.