Bitcoin Plunges Below $87K as Trump Crypto Hype Fades

Cryptocurrency markets experienced a significant reversal on Monday, with Bitcoin (BTC) falling back below the $87,000 mark. The rally sparked by former President Trump's social media post on Sunday, announcing plans for a U.S. crypto reserve, has largely faded.

As of mid-afternoon U.S. trading, Bitcoin was changing hands at around $86,700, barely above its level prior to Trump's announcement. Ether (ETH) has even slipped below its pre-Trump level, with the ETH/BTC ratio touching a new five-year low of 0.025. Other tokens mentioned by Trump, such as Solana (SOL), Ripple (XRP), and Cardano (ADA), have also given up some of their Sunday gains but remain slightly higher than before the president's posting.

Crypto trading firm QCP Capital noted that crypto volatility remains relatively high, with both major cryptocurrencies still reflecting a Put Skew until the end of March. The VIX, a measure of broader market unease in risk assets, is also elevated, particularly after recent tariff escalations from the U.S. administration.

Crypto stocks have also given up early gains on Monday, with several companies, including Core Scientific (CORZ) and Bitdeer (BTDR), now sporting sizable losses for the session. Medical equipment maker Semler Scientific (SMLR), known for its bitcoin treasury strategy, is down 7.3% after a DOJ investigation for possible violations of a federal anti-fraud law related to its marketing of a product called QuantaFlo.

The broader stock market is also in the red, with the Nasdaq shedding 1.1% and the S&P 500 down 0.8% ahead of Trump's promised tariffs on Mexico, Canada, and China. Chipmaking giant Nvidia (NVDA) is down 6.5% on news that Singapore has charged three men in a U.S. export controls breach case.

Jake Ostrovskis, OTC Trader at crypto market maker Wintermute, commented that concerns over U.S. growth and impending tariffs on China, Mexico, and Canada will be in focus, driving equities and rates.