They say that pride cometh before the fall, and the adage certainly proved true for the cryptocurrency – and, frankly, stock – market on April 2.
In the leadup to President Donald Trump’s Liberation Day reciprocal tariff announcement, numerous assets enjoyed strong rallies with, for example, Bitcoin (BTC) briefly soaring above $87,000 only to plunge to $83,662 by press time on April 3.
The same phenomenon was evident with the entire cryptocurrency market as the digital assets’ collective market capitalization soared to $2.77 trillion by April 2 afternoon, gaining more than $50 billion within the day.
Immediately as the reciprocal tariffs were revealed, cryptocurrencies’ total valuation fell off a cliff to the recent lows of $2.61 trillion, effectively erasing $160 billion in less than four hours.
Furthermore, even the slight April 3 rally only tempered the bloodbath, ensuring the final tally for the first 12 hours amounts to a $140 billion drop to $2.63 trillion, per the data FInbold retrieved from TradingView on the day.
Did any investments evade the Liberation Day bloodbath?
Unfortunately for cryptocurrency investors hoping that assets like Bitcoin would truly fill the role of digital gold, the latest bloodbath is the latest in the long line of evidence proving the market has become highly susceptible to external shocks and entered a phase of high correlation with stocks.
Indeed, by press time in the April 3 pre-market, most major companies’ shares had experienced at least a 3% correction, though the movement is far from universal.
Elsewhere, gold has proven its attractiveness as a safe haven since, while most other assets were plunging, it enjoyed a four-hour rally to new highs above $3,162.
Interestingly, the world’s largest commodity by market capitalization has experienced a downward correction to its press time price of $3,128 while risk assets were enjoying a slight recovery from the plunge.
Featured image via Shutterstock
