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Julia Smith
Author
Julia Smith
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Why Trust Cryptonews
Key Takeaways:
- Eric Trump encouraged followers to purchase cryptocurrency during the market downturn.
- Social media users pushed back against the advice, attributing Bitcoin’s decline to the administration’s trade policies.
- Market sentiment indicators have shifted to extreme caution as Bitcoin retreats from recent highs.
- The current administration has positioned itself as pro-cryptocurrency while establishing regulatory frameworks
- Uncertainty persists in the digital asset community regarding whether Trump’s policies will ultimately benefit the sector.
Eric Trump, son of U.S. President Donald Trump, urged his followers on X to “buy the dips” as Bitcoin fell below $90,000 on Tuesday. The decline raised investor concerns amid ongoing U.S. trade policies.
On February 25, he posted “₿uy the dips” on X, accompanied by a Bitcoin symbol.
Many users pushed back, linking Bitcoin’s drop to broader economic concerns, including tariffs.
“This is not a dip,” one user replied. “This is a bloodshed crash caused by the tariff and trade war.”
“How when we have to pay the bills?” another said.
“Didnt you say this 30% ago,” an additional replier wrote.
Bitcoin Fear & Greed Index Signals Extreme Caution
The Bitcoin Fear & Greed Index, which measures market sentiment, fell to 25, placing it in the “extreme fear” category.
Bitcoin had recently hit an all-time high of $109,000 but has since declined nearly 20%.
The downturn coincides with President Trump reaffirming his plans for new tariffs on Canada and Mexico.
“We’re on time with tariffs, and it seems that’s moving along very rapidly,” he told reporters at a White House news conference with French President Emmanuel Macron on Monday.
Trump’s Crypto Policies Under Scrutiny
Trump has positioned himself as a supporter of digital assets, stating he wants the U.S. to be “the crypto capital of the world.”
Last month, he signed an executive order establishing a task force to explore crypto regulations. However, some in the industry remain frustrated by the pace of regulatory developments.
As regulatory uncertainty looms, the crypto sector remains divided—some hopeful that Trump’s policies could usher in a more favorable framework, while others remain skeptical, citing slow-moving reforms and broader economic pressures.
Whether his administration can bridge this gap and deliver substantive change will likely shape the future of digital assets in the U.S.
Historically, extreme fear readings on the Bitcoin Fear & Greed Index have often preceded significant market rebounds. According to research from Glassnode, Bitcoin has delivered an average 6-month return of over 50% when the index falls below 30. However, recovery timeframes vary significantly based on broader macroeconomic conditions and regulatory developments. Notable previous recoveries include the 2018-2019 cycle where Bitcoin bounced over 300% after extended fear readings, though past performance doesn’t guarantee future results.
Trade wars create complex ripple effects through cryptocurrency markets. While Bitcoin has characteristics of a safe-haven asset during economic uncertainty, tariffs can reduce overall economic activity, decreasing available capital for investment across all markets. Research by the International Monetary Fund suggests that trade tensions can initially drive cryptocurrency adoption in affected regions as businesses seek alternatives to traditional payment systems. However, sustained trade conflicts generally create downward pressure through reduced institutional investment capacity and liquidity constraints.
President Trump’s executive order established a Presidential Working Group on Digital Asset Markets—an advisory body composed of senior officials from key federal agencies such as the Treasury, Justice, Commerce, and regulatory bodies like the SEC and CFTC, alongside select industry experts. Its mandate is to review and identify all existing regulations and guidance affecting digital assets, and within 180 days, submit recommendations to the President proposing regulatory and legislative reforms that look to create a unified federal framework for cryptocurrency. Key objectives include clarifying jurisdictional boundaries, enhancing investor protections (including anti‐money laundering measures), and evaluating policy options such as guidelines for cryptocurrency taxation and the potential creation of a national digital asset stockpile. Importantly, this working group serves in an advisory capacity—it does not possess independent authority to enact executive actions without the involvement of other branches of government.
Despite the administration’s pro-crypto positioning, several critical regulatory challenges remain unresolved. The classification of cryptocurrencies as securities versus commodities continues to create legal uncertainty, with the SEC and CFTC maintaining overlapping and sometimes contradictory jurisdictional claims. The regulatory framework for stablecoins, which represent crucial on-ramps to the crypto economy, remains underdeveloped. Additionally, the administration has yet to address cross-border compliance challenges, DeFi regulation, and environmental concerns related to proof-of-work mining. Industry experts suggest that these regulatory gaps could hinder mainstream institutional adoption despite positive political rhetoric.
Bitcoin’s current volatility is actually lower than during previous major market cycles. According to data from Coin Metrics, Bitcoin’s 30-day volatility index during the 2017 and 2021 bull markets frequently exceeded 100, while recent readings have remained below 80 despite significant price movements. This reduced volatility suggests increasing market maturity and greater institutional participation, which typically stabilizes prices. Comparatively, the S&P 500’s volatility typically ranges between 10-20, indicating that while Bitcoin has become less volatile over time, it still experiences significantly larger price swings than traditional financial markets.
