The team at digital assets firm Gemini noted that after surging to an all-time high of nearly $110,00 in mid-December, the price of bitcoin has experienced a protracted three-month lull, followed by a recent decline. Although the crypto market prices have surged considerably after President Donald Trump confirmed plans to launch a so-called crypto strategic reserve, a lot more is needed in terms of fundamentals and concrete actions to pave the way forward.
According to a blog post from Gemini, this downturn was “influenced by broader macroeconomic concerns—including tariffs, persistent inflation, and slowing economic growth—as well as the Bybit hack, which dented market confidence.”
As of Thursday, the price of bitcoin had pulled back to $84,000, ether to below $2.300, Solana to around $137 and XRP to $2.19. While BTC price is back above $90,000 and other altcoins are surging as well with Cardano (ADA) trading at over $1 at the time of writing, these gains might be temporary because there might be some developments this week that could negatively impact trader and investor sentiment.
The team at Gemini further noted that Solana, in particular, has been crushed from “a series of meme coin-related controversies that have turned off some investors, tumbling more than 40% percent over the past month.”
Despite these challenges, the update from Gemini pointed out that there are still “plenty of greenshoots in the crypto ecosystem.”
For instance, the SEC has recently dropped pending enforcement actions against Gemini, Coinbase, Uniswap, and other firms.
Meanwhile, Michael Saylor’s Strategy has amassed “nearly 500,000 bitcoin and has shown no appetite to stop using convertible debt to buy more. And more than a dozen U.S. states have introduced legislation aimed at creating a crypto buying program.”
In other words, crypto exchange Gemini noted that it’s “a confusing time in crypto.”
Patrick Liou, Gemini’s Associate Director of Institutional Sales, has offered his take on tariffs, “macroeconomic conditions he’s monitoring, and why crypto prices have yet to rally under president Donald Trump’s pro-crypto administration.”
Liou said that the most important macroeconomic indicators “will continue to be inflation data such as the consumer price index and personal consumption expenditures, because it is the primary determinant of the future interest rate path for the Federal Reserve (and other global central banks).”
For example, Wednesday’s CPI data showed inflation “rose 3% YoY, an uptick from 2.9% YoY in December.”
As a result, stocks and crypto markets “traded lower while yields rose.”
Liou added that sticky and stubborn inflation data will “likely leave rates at a “higher for longer” environment, while evidence of sustained cooling may greenlight the Fed to lower rates, which will be positive for crypto and risk assets generally.”
As a result, stocks and crypto markets “traded lower while yields rose.”
They also mentioned that all these positive headlines “are reflected in the price action – it’s just that the greenshoots started to occur as soon as Trump appeared on track to a victory on election night.”
Liou pointed out that if we recall the price of bitcoin was “just a shade below $70K on election day.”
He added that just over a month later, bitcoin hit the $100K milestone for the first time.
Liou also mentioned that one could argue that the markets “were efficient in pricing in the subsequent positive headlines mentioned above and the price today is justified as such.”
They Gemini executive added:
“Looking ahead, crypto markets will need incremental headlines for a further rally higher, such as nations/states/corporations allocating bitcoin on their balance sheets or stronger than expected follow through on what the market is expecting from the Trump administration. In addition, there have been a few macroeconomic headwinds, such as Deepseek and its implications on the GPU markets and the return of tariffs, that have been causing volatility in traditional markets that have spilled over to crypto markets.”
Liou further noted that tariffs will “create short term volatility in crypto markets and risk assets as a whole.”
He also stated that we have already seen “evidence of this with the tariffs to Canada, Mexico, and China and on aluminum products.”
Liou further noted:
“Many of these tariffs have been announced during the weekends, when traditional markets are closed but crypto is open. This has led to sharp selloffs in crypto markets after the weekend tariff announcements as the only liquid trading market open.”
Liou added that tariffs are inherently inflationary, which will “create impacts as detailed in the first question above.”
He pointed out that President Trump is citing the use of tariffs “as a way to bring counterparts to the negotiation table, instead of a long-term approach in imposing tariffs.”
He concluded that this will be critical in “determining what the implications of tariffs on crypto markets will be in the short and long term.”