The crypto market faced headwinds Thursday as Bitcoin (BTC) retreated, dipping below the key $80,000 mark amidst broader financial market turbulence. The leading digital asset was trading around $79,800, surrendering some gains accumulated earlier in the week as investor sentiment soured.
This downturn mirrored significant losses in traditional equity markets. Major U.S. stock indices closed sharply lower, reflecting widespread investor unease. The S&P 500 index dropped 3.46%, the tech-heavy Nasdaq Composite fell 4.31%, and the Dow Jones Industrial Average declined by 2.50%.
The sell-off followed remarks from President Donald Trump regarding his administration’s trade policies. Speaking at a Cabinet meeting, Trump acknowledged potential difficulties arising from tariff adjustments but maintained they were necessary for long-term gain, suggesting the transition phase could be challenging.
Trump also indicated uncertainty about extending a 90-day pause on certain tariffs, stating that higher rates could return if favorable trade agreements aren’t reached. When questioned about an extension, he remarked, “We’ll have to see what happens.” This added another layer of unpredictability for markets.
Compounding the economic concerns, Chicago Federal Reserve Bank President Austan Goolsbee highlighted rising anxiety among monetary policymakers. He expressed worries about a potential return to economic conditions reminiscent of the COVID-19 pandemic era, citing declining confidence as a risk factor for the broader economy. Such recessionary fears often drive investors away from riskier assets, including crypto tokens.
Reports also shed light on the administration’s previous balancing act regarding trade policy. It was suggested that the former president had previously accepted the possibility of a mild recession to avert a more severe downturn, later reversing course on some tariffs amid significant market volatility and rising Treasury yields.
That earlier policy shift, reportedly influenced by advice from National Economic Council Director Kevin Hassett and coordination by Treasury Secretary Scott Bessent amid turbulent bond markets, had previously contributed to a market recovery, including a strong single-day gain for the S&P 500. However, the current climate presents renewed challenges for investors across traditional finance and the digital asset space.