On February 2, 2025, Bitcoin's market dominance surpassed 60% of the total cryptocurrency market capitalization. This surge was primarily influenced by a significant drop in altcoin values following new tariffs imposed by U.S. President Donald Trump, which included a 25% tax on imports from Canada and Mexico, and a 10% tax on goods from China.
Data from CoinMarketCap indicated that over the past week, Ethereum (ETH) fell by approximately 9.3%, XRP declined by 13.8%, and Solana (SOL) dropped by 19.3%. Investors are now shifting towards safer assets like U.S. government securities, anticipating increased inflation and sustained high interest rates throughout 2025.
Trader and analyst Van Nuener warned that the cryptocurrency market may face further declines following the opening of U.S. futures markets on February 2. He stated, 'The futures will probably open down and that may cause crypto to do the same.'
Additionally, BitMEX co-founder Arthur Hayes had previously predicted a sell-off in the crypto market around Trump's inauguration, suggesting that the optimism following the election of a pro-crypto president might dissipate as traders realize regulatory changes will take time.
Ryan Lee, chief analyst at Bitget Research, forecasted a potential correction in Bitcoin's price to $95,000 in the near term, emphasizing that labor market indicators and Federal Reserve policies will be crucial in determining Bitcoin's trajectory moving forward.
The recent downturn in U.S. tech stocks and cryptocurrencies was exacerbated by the launch of DeepSeek R1, an open-source AI model from China, which raised concerns in the market. The release was considered a 'black swan' event, prompting the Trump administration to hint at stricter export controls on Nvidia's products to China, further intensifying market uncertainty.