On March 10, 2025, both the crypto markets and the US stock exchanges experienced significant declines, with US stocks erasing over 1.75 trillion dollars from Wall Street due to political uncertainty, investor outflows, and external shocks.
Indeed, even the crypto market has suffered billions in losses, with Bitcoin (BTC) plummeting to $77,393 and the overall cryptocurrency market capitalization falling to $2.57 trillion.
Let’s analyze the five main factors behind this epic collapse.
The new Trump tariffs and the trade war
The return of Donald Trump to the White House has shaken global markets. His decision to impose new tariffs on imports from China, Canada, and Mexico has fueled fears of a new trade war.
- Dow Jones -2.3%, S&P 500 -3.1%, Nasdaq -4.3%: The U.S. stock market experienced its worst day since 2022.
- Recession risks: Trump has refused to rule out a recession, increasing uncertainty and market volatility.
- Commercial retaliations: China has threatened countermeasures, such as tariffs on American technological and agricultural goods, increasing global economic tensions.
- Impacts on the manufacturing industry: U.S. companies, reliant on foreign raw materials and components, experience an increase in production costs.
- Bitcoin falls below $80,000: The combined effect of the trade war and the reduction of liquidity in the market has hit the crypto sector.
Disappointment on the United States strategic crypto reserve
On March 6, 2025, the president signed an executive order to create a Strategic Crypto Reserve. However, the absence of immediate Bitcoin purchases by the government disappointed the market.
- BTC -4% in 24 hours: The lack of reserve support contributed to a rapid loss of value.
- Liquidations for 650.8 million dollars: The pressure on leveraged positions led to forced sales in the crypto market.
- Crypto Fear and Greed Index at 20: Investor sentiment is now in extreme fear territory.
3. Massive capital outflows from crypto
Investment funds in criptovalute have recorded significant capital outflows.
- 876 million dollars in outflows in the week of March 7.
- 4.75 billion dollars of outflows in a month.
- Assets under management fell to 142 billion dollars.
- Bitcoin accounted for 756 million dollars of the outflows.
- Impact on other safe-haven assets: While the cryptos are crashing, gold and bonds are experiencing growth, indicating that investors are seeking safe harbors.
4. The Bybit hack and the crisis of trust in exchanges
On February 21, 2025, the exchange Bybit experienced a hacker attack for 1.46 billion dollars, attributed to groups linked to North Korea.
- Fuga dagli exchange: Many investors have withdrawn funds due to fear of new attacks.
- Increase in withdrawals and sales: The reduced confidence in trading platforms has triggered a rush to sell.
- Imminent regulatory interventions: Regulators are intensifying surveillance on the sector, which could further restrain the market.
5. Fear and volatility dominate the markets
The uncertainty about Trump’s economic policies and the risk of recession have amplified volatility:
- Tesla -14%: The drop in the stock reflects concerns about the tech sector.
- S&P 500 in negativo da inizio anno: The index closed its fourth consecutive day of losses.
- Bitcoin down 12% in the last week: The flight from speculative assets is underway.
- Increase in volatility on a global scale: The European and Asian stock markets are experiencing the ripple effects of the American crisis.
- Official sources confirm the crisis: According to the Federal Reserve, uncertainty about interest rates is contributing to market instability, while data from CoinShares highlight an unprecedented capital outflow from crypto.
What to expect in the coming months?
The market remains in a phase of high volatility and uncertainty. However, some elements could offer a rebound:
- Possible reconsideration by the Fed: If the markets continue to suffer, the Federal Reserve might reconsider its interest rate policy.
- Stabilization of Trump’s policies: If the administration clarifies long-term economic strategies, the market could find a new equilibrium.
- Recovery of the crypto market: Once the liquidations are exhausted and confidence improves, Bitcoin and the main cryptocurrencies could rebound.
The collapse of March 2025 highlights the interconnection between politics, regulation, and financial markets. Trump’s actions, cyberattacks, and capital outflows triggered a perfect storm.
