GuShiio.com The currency circle has become one of the most sensitive areas in the tariff storm due to its emerging, high-risk, high-return, and imperfect supervision.
Author: Penny, rhythmic BlockBeats
Since Trump and his wife released their own Meme coins,$Trump and $MELANIA, which attracted huge amounts of money to participate, the currency circle has fallen into a state of liquidity exhaustion in a short period of time. On the other hand, the impact of the domestic AI model DeepSeek, a series of negative news such as the cancellation of Bitcoin’s legal tender status by sovereign countries, and the imposition of tariffs by the United States have made the already sluggish market even worse.
The first drop after the year was triggered by Trump’s stick of imposing tariffs.
Policy binding currency price? Highly sensitive crypto market
Trump’s tariff collection policy is hitting the market violently. U.S. President Trump signed a tariff order on February 1 local time, imposing an additional tariff of 25% on imported products from Canada and Mexico, and a 10% tariff on energy resources from Canada, tentatively taking effect on the 4th. In addition, Trump signed an executive order on the 1st, which will impose a 10% tariff on goods imported from the mainland of China on the original basis.
The global risk market responded quickly to this, with cryptocurrencies bearing the brunt. The price of Bitcoin fell sharply from around US$105,000 that day, falling below the US$100,000 mark, and even fell below US$92,000 at one time, falling more than 7% within 24 hours. Ethereum fell by about 25% at one point, to its lowest level since early September last year. Other mainstream cryptocurrencies also plunged sharply, all falling by more than 10%, making it an epic plunge.
On February 3, Trump said he had reached an agreement with the Mexican president to immediately suspend expected tariffs for one month. Bitcoin rebounded to a maximum of $102,500 after the tariff policy was delayed, Ethereum rebounded to a maximum of $2,923, and other mainstream currencies basically rebounded back to their prices before the crash.
Jeff Park, director of strategy at Bitwise Alpha, said tariffs may just be a temporary tool, but in the long run, Bitcoin will not only go higher, but also go faster, because both parties in the trade imbalance want Bitcoin, so the end result is the same: higher price, faster speed.
It can be said that the increase in tariffs caused global stock markets to fall sharply, and along with other bad news, the cryptocurrency market also fell. The imposition of tariffs is not only a reshaping of the international trade pattern, but also a heavy blow to the confidence of global financial markets. The currency circle has become the most sensitive in this storm due to its emerging, high-risk, high-return, and imperfect supervision. One of the most sensitive areas also confirms the increasingly close connection between the currency circle and global macroeconomic policies.
Issuing Meme coins to suck blood market
On January 18, 2025, Trump announced the launch of his personal Meme coin $TRUMP on his social account. Once launched, the coin increased by more than 15000% in just 12 hours, reaching around US$30, and its highest market value exceeded US$80 billion. Such an astonishing increase and huge market value quickly attracted a large influx of funds. Many investors who originally invested in mainstream cryptocurrencies such as Bitcoin and Ethereum have successively sold their other currencies and switched to Stuha $TRUMP. In addition to SOL, other currencies other than were heavily sucked in the short term, and other Meme coins, AI Agent coins, etc. fell sharply across the board.
In addition, the Trumpcoin issuing team holds up to 80% of the locked coins, which means that they have strong control over the price of the coin. After the lockup period is gradually unlocked in the future, whether it is directly smashing the order on the exchange or making a pledge on the DeFi chain, it may have a huge impact on the market. At the same time, this behavior will further disrupt the market order of the currency circle, make it more difficult for other truly valuable cryptocurrency projects to obtain financial support, and cause an imbalance in the entire currency circle ecology.
The blood-sucking effect brought about by Trump’s coin issuance not only led to the unreasonable flow of funds in the currency circle in a short period of time, but also had a serious negative impact on the development of other cryptocurrency projects and the stability of the market. DeSci, DeFAI and AI Agents pressed the pause button, and based on the fast pace of the currency circle’s consistent speculation of new rather than old ones, these sectors will inevitably need greater impetus to revitalize their glory. The currency circle is facing more uncertainties and risks.
Arthur Hayes, co-founder and chief information officer of BitMEX, believes that $TRUMP’s skyrocketing to a fully diluted valuation (FDV) of nearly $100 billion in 24 hours is definitely an absurd market signal.$TRUMP’s skyrocketing signal is similar to FTX’s purchase of Major League Baseball referees ‘advertising sign during the 2021 bull market-it symbolizes the approach of the top of the market.
Calling for orders after clearing, WLFI’s confused behavior
Arkham data shows that World Liberty Financial carried out a large-scale transfer of crypto assets on the evening of February 3. Its ETH position dropped from around 66k on February 2 to 52, almost completely clearing its ETH assets, mainly flowing into Coinbase Prime deposit addresses.
At the sensitive time of transferring assets, Trump’s second son Eric Trump said on his social platform that now is the best time to increase ETH (In my opinion, it’s a great time to add ETH.). The original version of the tweet also contained the following sentence: “You can thank me later.”
The community questioned this. Careful investors believed that the ETH position dropped from 66k to 66, with only one unit missing. This was obviously an attempt to avoid being discovered to have assets transferred and then suspected whether a cabal was cutting leeks. WLFI explains this that these measures are aimed at maintaining a strong, secure and efficient financial system, and are only to reallocate assets for ordinary business purposes and will not sell tokens. However, once the funds are transferred to Coinbase Prime, we have no way of knowing what they will be used for. Investors can only analyze them based on currency price fluctuations and subsequent WLFI asset operations.
Interestingly, on the morning of February 6, Eric publicly called for BTC again, and also mentioned the family project WLFI. The community joked it,”Is it time to sell Bitcoin next?” Maybe this was indeed a pre-shipment call, maybe it was to boost confidence in being suppressed by the additional tariffs, or maybe it was just a routine promotion of family projects. After all, ordering and cx are the norm for these people.
Encryption czar, but it’s also a big encryption cut?
David Sacks, chairman of the Crypto Council, is known as one of the founders of PayPal and later became famous by creating Yammer and selling it to Microsoft for $1.2 billion. In the currency circle, David Sacks’s most important identity is an investor in the crypto venture capital firm Multicoin and a Solana maximalist, known as the “Crypto Tsar.”
Because $TRUMP is deployed on the solana chain, and David Sacks always remained silent about these “zero-sum Meme coins” when Trump issued $TRUMP coins, many people believe that the chairman of the Cryptography Committee must be involved.
Another piece of evidence is that David Sacks has a “criminal record”. In March 2024, David Sacks posted a post about his own name Memecoin $Sacks.
Although he tweeted nine times telling people not to buy when they started buying, this confirmed evidence that he “once issued coins,” which is exactly the same way he issued $TRUMP coins. (According to community members, David Sacks recently deleted his post about $Sacks.)
This made many people dislike David Sacks, feeling that his methods were too eager for quick success and quick benefits and too eager to seek benefits through this radical method. Even if Sacks was not directly involved, as chairman of the Cryptography Committee, he was responsible for the incident. There are even rumors that some people have suggested that the entire leadership team of David Sacks ‘encryption committee should be replaced and a new team should be created.
On February 5, David Sacks reiterated at a press conference that opened at 3:30 Beijing time that it would “clarify the crypto regulatory framework,””ensure that crypto innovation occurs in the United States,” and “create a golden age for digital assets,” etc. Work goals, but no new (or specific) content was announced. David Sacks also used the less certain word “evaluate” when talking about building a Bitcoin reserve (the U.S. government used the word “evaluate” to set the stage when it had to deal with the problem but did not want to really solve it.) Perhaps due to the fact that the press conference “did not release any positive news”, which led to market expectations being disappointed, Bitcoin fell below US$99,000 and fell as low as US$96,147.
Is it a real Builder or a bigger sickle?
Looking back at Trump’s behavior over the years, his attitude on cryptocurrency issues has changed very clearly. During his last term, he publicly stated that cryptocurrencies such as Bitcoin were “scams,” but now he promises to make the United States the world’s “cryptocurrency capital” and “Bitcoin superpower.” He also formed a cryptocurrency group and established a family Defi project to lift restrictions on the sale of new tokens and strengthen ties between cryptocurrency companies and other traditional financial companies.
There may be many reasons behind Trump’s change in attitude. On the one hand, the cryptocurrency market has developed rapidly in recent years, with a large investor base and huge economic influence. Joining this force will help increase his political support rate; on the other hand, there are strong interest groups behind the cryptocurrency industry. These groups may exert influence on Trump through political donations and other means, prompting him to introduce policies that are conducive to the development of cryptocurrencies. In addition, Bitcoin can be seen as a tool to hedge against the wavering status of the US dollar. Trump has included it in the country’s strategic reserve and is also a means to attract capital inflows and maintain US dollar hegemony.
As the election results came to fruition, Trump’s every move gradually became a weather indicator of hot spots in the currency circle. Especially before taking office, Trump issued his own Meme coins, which caused the madness of countless investors outside the circle and created many phenomenon-level myths of sudden wealth. He thought this was the beginning of a bull market, but then the issuance of $MELANIA coins shattered this illusion, which made the market calm down and doubted the purpose of issuing the coins. The AI Agents, which were in full swing before, have been sucked by $TRUMP and $MELANIA, and have been hit by deepseek, and have been sluggish. Although Meme’s craze continues, the maximum market value of a large number of tokens continues to shrink, the zeroing time is shortening, and mainstream coins continue to fall after the carnival. We can’t help but wonder whether Trump’s pro-encryption purpose is really what he wants to be a Builder, or should he maximize his interest groups and the hegemony of the United States during his term of office, work hard, and finally leave a place to wander?
In the short term, the market will inevitably experience sharp rises and downs to absorb various major trends. However, long-term value growth and industry precipitation require not only favorable policies, but a two-way game between the market and politicians. Judging from his series of commitments and statements, he seems to have a positive support for cryptocurrencies. However, the huge changes in his past remarks and positions are difficult to fully convince. Will he really spare no effort to promote the development of cryptocurrencies and make the United States a paradise for cryptocurrencies? After Trump, who is always characterized by “unexpected” characteristics, can the favorable policies he promised be implemented, or is all this just a superficial attempt to gain political benefits? These issues are full of uncertainty.
For currency investors, Trump’s current attitude and policy direction are like a double-edged sword. If he can really fulfill his promise and create a loose and friendly development environment for cryptocurrency, then the currency circle is likely to usher in a new round of prosperity; However, Trump’s frequent sanctions against other countries after taking office, the commercial style of himself and his family members that has been criticized, and the contradictions and divisions within his team will also aggravate global economic and political instability and lead to unpredictability in his encryption policy. This instability will spread investor panic and have a negative impact on the cryptocurrency market.
It can be said that Trump’s tariff increase is only the beginning of his impact on the currency circle after taking office. In the future, as he promotes and implements his policies in various aspects such as economy and diplomacy, there is a high probability that the currency circle will face more violent fluctuations. In such an environment, investors need to pay close attention to policy developments and make investment decisions more prudently.
The bigger the waves, the bigger the fish. No matter what unknowns lie ahead, this encrypted ship has set sail, ready to face the stormy waves.
