Bitcoin prices have stalled after soaring following Donald Trump’s US presidential victory, but fears are emerging that a $4 trillion crypto bubble could be about to pop. The bitcoin price has surged to almost $110,000 per bitcoin, fueled by Elon Musk’s leaked plans for crypto in the White House.
However, Federal Reserve chair Jerome Powell has now flung the door open for Wall Street to further adopt bitcoin and crypto, with a warning that banks must understand and service the risks associated with these assets. “Banks are perfectly able to serve crypto customers as long as they can understand and service the risks,” Powell said at a press conference.
Cryptocurrency prices have taken a huge step lower, wiping around $300 billion from the combined market, following Trump’s tariff announcement on US trade with China, Canada, and Mexico. The tariffs have also hit global stock markets, with investors balking at the prospect of tighter trading conditions.
Despite the volatility, some analysts are optimistic about the future of bitcoin, citing a potential long-term benefit from the upcoming trade war. Bitwise investment guru Jeff Park has outlined his thesis on why the coming trade war could be good for bitcoin, saying “tariffs might be just a temporary tool, but the permanent conclusion is that bitcoin is not only going higher—but faster.”
The shift in sentiment towards crypto under Trump marks a major change from the previous Biden administration, which was hostile towards the technology. Wall Street giants have leaned into bitcoin and crypto over the last year with a fleet of spot bitcoin exchange-traded funds (ETFs) helping to normalize bitcoin and crypto among the financial establishment.
As markets continue to fluctuate, investors are advised to stay informed through daily newsletters like CryptoCodex, which provides up-to-date news and analysis on the cryptocurrency market.
Source: https://www.forbes.com/sites/digital-assets/2025/02/03/the-fed-just-confirmed-a-huge-crypto-game-changer-as-trump-sparks-bitcoin-price-crash-fears