Crypto Suffers Worst Selloff in Years on Trump Tariff News

Crypto is getting absolutely rocked following President Trump’s move to rollout new 25% tariffs against Canada and Mexico.

To give a flavor of worsening U.S. relations with our neighbors, the U.S. national anthem was booed during a Raptors game in Toronto last night. And if Canadians didn’t jump on it first, boos likely would have rained down from crypto fans in attendance as well as Ethereum crashed 25% and Bitcoin slumped more than 10% over the weekend.

Here’s everything inside the crypto fallout you should know, as Trump’s first move introduced new volatility — but could still be the playbook that sends Bitcoin “violently higher,” according to one trusted analyst. (As always we covered these stories first in our weekly news recap show above.)

Bitcoin Dominance Surges to New High

After Trump’s tariff announcement there was a very clear dichotomy — Bitcoin pulled back, everything else got absolutely clobbered. In fact, Bitcoin’s relative dominance as measured as a percentage of its total market cap versus everything else hit a new local high after spiking above 63%. Ethereum’s price crashed 25% at one point on a 24-hour basis, only trailing the pandemic and the 2021 flash crash on a percentage-loss basis. Altcoins also got clobbered.

But as crazy as it sounds, Bitwise’s Jeff Park broke down in a viral post over the weekend why Trump’s tariffs could be the beginning of a new financial strategy that looks to pull different levers to pressure the 10-year yield lower and to enable cheap U.S. borrowing. As Jeff explains:

To understand tariffs today, there are two contexts you have to frame the conversation in: 1) the curse of the Triffin dilemma, and 2) Trump’s personal goals. By analyzing both, the end game becomes clear: tariffs might be just a temporary tool, but the permanent conclusion is that Bitcoin is not only going higher—but faster.

First, the Triffin dilemma: The US dollar status as a reserve currency gives the US what is called “exorbitant privilege” in financial transactions/trade, and it has a few implications: 1) the dollar is structurally overvalued due to its need to be held as reserves by other countries in a price-inelastic manner, 2) the US has to run a persistent trade balance deficit to supply the world with those dollars, and 3) the US government therefore can borrow persistently cheaper than it should be able to. The US wants to keep #3, but rid #1 and #2–but how? Enter tariffs. … As a result, the US is charting a path to achieve the holy grail of fiat alchemy: lower dollar and lower yield.

Of course, a lower dollar and lower yield on 10-year bonds definitely is supportive of Bitcoin’s price. As such, it is an interesting end game that a lot of people could be missing if they’re simply looking at tariffs as leverage over our neighbors to influence the fentanyl drug problem or border policy.

MicroStrategy Breaks BTC Buying Streak

After 12-weeks of consecutive Bitcoin buys, Michael Saylor’s MicroStrategy finally hit the pause button on scooping up Bitcoin. He took to X to make the announcement — which is perhaps also behind some of Bitcoin’s outsized move. Not having an additional $1 billion of buy support from one of its biggest bulls certainly didn’t help this week — but expect some of that buy pressure to return as volatility cools down.

The First Onchain Bankruptcy?

As we’ve been covering, THORChain, one of the largest decentralized swapping protocols, has been under pressure. The protocol enables users to swap from Bitcoin to Ethereum or to a number of chains by using its token, RUNE, as a temporary intermediary. People can also deposit into liquidity pools to gain passive exposure to RUNE and other tokens.

The problem was, the saving and lending tools built on top of THORChain were not done so with the best economics in mind, and as the price of RUNE fell, it became clear the platform did not have enough money to pay people back. RUNE’s price fell more than 70% over the last month as news of the problem spread and a plan was conceived.

This weekend, the community approved the first debt-to-equity restructuring deal we’ve seen in the space by proposing a new token ($TCY) that will give holders exposure to 10% of all THORChain swap fees in perpetuity. The hope is that it re-aligns interests in the community to fill what has now become about a $200 million hole. So far, RUNE’s price has fared alright — and clearly a lot more needs to happen in order to be fully out of the weeds — but for now it was interesting to see a proposal get proposed, approved, and set to be implemented in such short time.

Tether Profits Soar to $13 Billion

On the other end of the spectrum, the world’s largest stablecoin company, Tether, continues to print cash (pun intended.) We headed down to El Salvador for the Plan B Conference to interview Tether CEO Paolo Ardoino as he announced the company posted $13 billion in profits last year.

It’s an insane figure, considering Tether just holds cash and cash equivalents in a vault and sells tokens that are supposed to trade at $1. As easy as that sounds, we’ve seen others fail in the past. So, why is Tether so good at it, why hasn’t someone else de-throned them if it’s so easy, and what is Tether looking to do with all that money?

Our full interview with Paolo will post tomorrow on Coinage.Media and later on our YouTube channel (with ads.) If you want to watch first, don’t forget to mint or scoop up a Coinage NFT. (Prices on our co-ownership tiers have risen after news of our first distributions to NFT holders. You can read more about that here, and see why Coinage is delivering on its promise to walk the walk as the first Web3 outlet that’s actually Web3.

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