In February 2025, the crypto market experienced severe fluctuations, primarily due to the uncertainty triggered by Trump restarting tariff policies. Although the market saw a decline, it did not reach a crash level, and some institutions were buying the dip.

Author: Celestine Riza Tsuki

Translation: Baihua Blockchain

Imagine waking up to see your cryptocurrency portfolio filled with losses. Bitcoin is down, altcoins continue to fall, and the market lost $230 billion in a single day. In the last two weeks of February 2025, the crypto market underwent turmoil, with digital currency prices plummeting over 8% in one day.

Some people feel anxious as discussions on social media about an impending collapse of the crypto market grow louder. But is this really a decisive moment, or just a minor obstacle in our journey?

Let’s take a look at the reasons behind this market crash; it’s not a coincidence, and also analyze why whales might be enjoying themselves while you feel the pressure.

The numbers are staggering. CoinGlass estimates that over $2.1 billion in leveraged positions were liquidated in just the past day, with $18.3 billion being losses from long positions. Bitcoin dropped to $96,000, hitting a three-week low, while Ethereum, after experiencing a larger decline, closed at $2,800.

But is this a crash? Not yet. Here are the reasons behind this market turbulence.

1. Trump's Tariff Policy

What triggered this chaos? It was President Trump's tariff policy. According to the Associated Press, he has just restarted a 25% tariff on imports from Canada and Mexico, which will take effect next month after a brief suspension. He also threatened to impose a 25% "reciprocal" tariff on EU cars and other goods.

The market hates uncertainty, and the crypto market is no exception, especially when trade barriers can lead to rising prices and liquidity shortages.

Take cars as an example; a 25% tariff on cars from Canada and Mexico could add $5,000 to $10,000 to the cost of a mid-range vehicle crossing into the U.S., significantly impacting consumers and automakers like Ford or GM.

Food is not exempt either… such as avocados from Mexico or maple syrup from Canada. That 25% increase could mean a 10% to 15% rise in the prices of imported food, exacerbating inflation concerns.

2. Uncertainty and Intense Reactions

This is just a continuation of the discussions among traders and news media since Trump threatened to impose tariffs a few weeks ago. Posts on platform X and analyses from Crypto Briefing directly linked this 8% drop to the trade war.

Investors are reducing risk, pulling out of speculative assets like Bitcoin and Ethereum in preparation for higher costs and slower growth. According to CoinMarketCap, the Crypto Fear & Greed Index earlier fell into the "fear" zone.

This is not a 50% drop, nor is it a bear market like in 2018. This is merely a market fluctuation, a "reflexive" response to macro uncertainty. Since Trump was elected in 2016, Bitcoin has risen 40% and is close to its all-time high of $109,000 set in January. The fundamentals have not changed.

While retail investors are panic selling, whales are quietly buying. As a model for corporate Bitcoin adoption, MicroStrategy purchased 20,356 Bitcoins between February 18 and 23, spending $1.985 billion at an average price of $97,514 per Bitcoin, as reported by Investing.com on February 24.

As of February 23, their Bitcoin reserves reached 499,096, with a total expenditure of $33.1 billion, averaging $66,357 per Bitcoin. This is not a sign of a market crash, but rather an opportunity to "buy the dip."

3. What’s Next?

If the tariffs are implemented as planned, more volatility is expected. Higher commodity prices will hit consumer confidence, and investors will turn to safer investments. Bitcoin's short-term status as a "risk asset" will be challenged again.

However, some believe that the trade war could be long-term beneficial for Bitcoin in the context of a depreciating dollar and increased Bitcoin adoption. But right now, the market is driven not by fundamentals, but by fear.

For ordinary investors, it’s important to stay vigilant, keep an eye on the news, and prepare for potential volatility, because this is not a crash yet, but it is definitely a warning signal.

Article link: https://www.hellobtc.com/kp/du/02/5692.html

Source: https://medium.com/@rizakanrei/crypto-crash-or-just-a-dip-0b6febf2bfd6

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