Crypto Market Plummets: Bitcoin Drops 6%, Ethereum Falls 5% Amid Policy Uncertainty

The recent downturn in the crypto market has left investors scrambling for answers. The sharp decline can be attributed to a combination of factors, including changes in government policies, regulatory uncertainty, and global economic instability. These elements have collectively contributed to a market meltdown, causing significant losses for major cryptocurrencies.

One of the primary triggers for the market crash has been the introduction of new economic policies. The administration's strategies, which include reciprocal tariffs set to take effect in April, have raised fears of a potential recession. This uncertainty has led to a sell-off in both traditional and digital assets, with the S&P 500 experiencing one of its worst days in months. Bitcoin, in particular, has been heavily impacted, falling more than 6% after a disappointing White House crypto summit. The lack of clear direction from the government has left investors hesitant, causing them to move away from riskier assets like crypto.

Regulatory uncertainty has also played a significant role in the market's decline. The repeal of a law requiring decentralized finance (DeFi) platforms to report transactions to the IRS initially seemed like a positive development for crypto. However, it has only added to the confusion, making investors more cautious. Additionally, the announcement of a U.S. Crypto Strategic Reserve, which could include major cryptocurrencies like Bitcoin, Ethereum, Ripple, Solana, and Cardano, has left many questioning its impact on the market. The lack of details about how this reserve will operate has further exacerbated investor concerns, with some fearing that government intervention could disrupt the decentralized nature of crypto.

Global economic worries have also weighed heavily on the crypto market. Factors such as deflation risks and escalating trade tensions have dampened investor sentiment. Asian markets have suffered, while European markets remain cautiously optimistic. Commodities like crude oil and Bitcoin have declined, reflecting a risk-averse climate. The uncertainty surrounding U.S. policies, coupled with global economic struggles, has made investors nervous about the future of crypto. Many are shifting their funds into stable assets, waiting for clearer signals from the market.

Major cryptocurrencies have reacted differently to these challenges. Bitcoin has fallen below $82,000 due to uncertainty surrounding U.S. government involvement in crypto. Ethereum has dropped by about 5%, struggling to stay above $2,000. XRP has plunged to $2.19, marking