• Cryptocurrencies have seen a sudden dip as Trump proposes a 50% tariff on EU goods.
• Bitcoin (BTC) has dropped by 4% while Ethereum (ETH) has dropped by over 3%.
• As the market braces for tariffs’ impact, the recently held TRUMP memecoin gala dinner has stirred controversy and market volatility.

The cryptocurrency market, known for its volatility, is now facing fresh uncertainty as US President Donald Trump intensifies global tariff negotiations, sending shockwaves through both traditional and digital financial systems.

Bitcoin (BTC), which recently hit an all-time high of $111,814, has become increasingly sensitive to geopolitical developments, with its price movements closely tracking Trump’s latest trade threats.

Notably, BTC has today experienced a sharp 4% decline, with Ethereum following closely with a 3.2% drop following Trump’s Truth Social post declaring that negotiations with the European Union were “going nowhere,” a statement that immediately rattled markets.

As panic spread, over $300 million in leveraged positions were liquidated, showcasing how digital assets, often viewed as uncorrelated, are becoming more reactive to global policy decisions.

90-day tariff pause almost coming to an end

As the 90-day tariff pause nears its expiry, Trump has proposed a 50% tariff on EU imports, alongside a 25% tariff specifically targeting iPhones manufactured abroad, raising alarms about broader economic implications.

Investors now fear that these tariffs could not only escalate trade tensions but also lead to retaliatory actions from the EU, further complicating global market conditions.

Even though the EU has so far refrained from escalating the situation, the clock is ticking, with a 90-day tariff pause set to expire in July, placing immense pressure on ongoing negotiations.

Only the United Kingdom has finalised a trade agreement so far, and while India is expected to sign within days, other major players remain in a tense waiting game.

Market downturn amid fears of resumption of tariffs

With July just a month away, market watchers like Crypto Caesar now see Bitcoin’s $110,000 level as a key resistance point, with traders emphasising the need for BTC to hold above $109,000 to preserve the current bullish structure.

$BTC – #Bitcoin with the retest after President Trump proposes 50% tariff on the European Union starting June 1, 2025. Here we go again. We need to hold the green zone. pic.twitter.com/N9BIHUA18Q

— Crypto Caesar (@CryptoCaesarTA) May 23, 2025

Ethereum (ETH) has not been spared from the volatility, holding a support level at $2,500 but struggling to breach the persistent resistance at $2,700, even as daily losses extend to 4%.

Notably, the ETHBTC pair continues to drift downward, suggesting weakening momentum in altcoins unless the broader market stabilises or Ethereum regains relative strength.

Pi Coin, another asset under scrutiny, showed signs of upward movement earlier this month but failed to maintain gains above $1.23 due to aggressive short-term selling and long-term investor scepticism.

US tech stocks have mirrored the downturn in crypto, with Apple shares falling amid fears that higher costs could be passed on to consumers, hurting demand and corporate profits alike.

Trump’s involvement in crypto stirs controversy

Amid all this, Trump’s personal involvement in crypto has added an unexpected layer of controversy, culminating in a high-profile gala for top holders of the TRUMP memecoin.

The event, attended by major figures like TRON founder Justin Sun, drew widespread criticism and accusations of corruption, especially as federal lawmakers call for investigations into presidential conflicts of interest in cryptocurrency ventures.

As the top holder of $TRUMP and proud supporter of President Trump, it was an honor to attend the Trump Gala Dinner by @GetTrumpMemes.

Thank you @POTUS for your unwavering support of our industry!#MakeCryptoGreatAgain pic.twitter.com/Yy2TuWEgzT

— H.E. Justin Sun (@justinsuntron) May 23, 2025

Following the gala, the TRUMP token spiked to $16 before dropping to $13.81, reflecting how quickly sentiment can shift amid political spectacle and regulatory uncertainty.

While Trump’s supporters argue that his aggressive trade stance is a strategic play to bring manufacturing back to the US, economists warn of rising consumer prices and slower economic growth.

Crypto traders, already bracing for volatility, now find themselves navigating a complex intersection of policy, politics, and profit, where even a single headline can trigger billions in liquidations.

As July approaches and the tariff deadline looms, the crypto market remains on edge, anticipating either a breakthrough in trade talks or another wave of volatility that could reshape investor confidence once again.

The US Securities and Exchange Commission (SEC) is reportedly considering whether XRP qualifies as a commodity rather than a security in its ongoing settlement negotiations with Ripple. 

According to journalist Charles Gasparino, the SEC is weighing similarities between XRP and Ethereum (ETH). The agency’s current administration reportedly considers Ethereum a commodity despite its initial issuance through an initial coin offering (ICO). 

Gaspatino said:

“ETH was obviously issued as an ICO; its characteristics on issuance was no different than XRP — both used to finance the buildout of a platform, yet Ripple got sued and Ethereum didn’t because ETH had since morphed into a commodity. What is being discussed now is the comparison between the 2 cryptos.”

The commission’s evaluation of XRP’s trading utility and market function could be crucial in determining the final terms of its lawsuit against Ripple, which could result in a potential settlement.

The SEC’s lawsuit against Ripple, filed in December 2020, alleged that the company conducted an unregistered securities offering through the sale of XRP. 

However, in August 2023, US District Judge Analisa Torres issued a pivotal ruling that differentiated between Ripple’s institutional and retail sales. The court determined that while institutional sales of XRP constituted investment contracts and thus violated securities laws, secondary market sales to retail investors did not qualify as unregistered securities offerings. 

As a result, the ruling imposed a $125 million penalty on Ripple and issued a permanent injunction restricting institutional sales of XRP.

Potential settlement

Recent reports suggest the case is in its final stages of resolution, with discussions focused on securing terms that reflect evolving regulatory perspectives on crypto. 

Ripple’s legal team is allegedly pushing for reduced penalties, arguing that an implicit admission of wrongdoing conflicts with the SEC’s shifting stance on crypto enforcement.

The company contends that if the SEC is reconsidering the regulatory classification of digital assets, its settlement terms should align with this evolving framework.

Attorney James Murphy, known as MetaLawMan, suggested that the SEC would have accepted a settlement to drop appeals and collect the $125 million penalty “in a heartbeat.”

However, this outcome may not be favorable for Ripple, particularly if the company intends to pursue a future exempt securities offering or an initial public offering.

The SEC’s deliberations on XRP’s classification reflect broader uncertainties in crypto regulation. If the agency recognizes XRP as a commodity, it could set a precedent for other crypto facing regulatory scrutiny, such as Solana (SOL) and Cardano (ADA).

Mentioned in this article

Key Takeaways

• A proposed 30% tax on crypto mining appears to have been cut as part of US debt ceiling negotiations 
• Decision a win for crypto miners, who are struggling amid rising hash rate and increased electricity costs 
• Miners also held onto Bitcoin reserves through pandemic bull market, a mistake which proved fateful

When you break down the Bitcoin mining business into simple terms, like any business, you get revenue and costs. Revenue comes in the form of Bitcoin, earned via the block subsidy reward and transaction fees. Costs, on the other hand, are mainly derived from electricity. 

Firstly, revenue: in the last couple of years, the Bitcoin price has fallen precipitously, thus hitting miners where it hurts. While 2023 has seen a bounceback, with Bitcoin currently trading up 68% on the year at $28,000, the asset remains 60% off its peak in late 2021. 

This spike in revenue also led a lot of miners to increase their investments across the space, scaling up their operations and adding new equipment. With the surge in demand, hardware prices spiked. Since then, demand has fallen off in line with the Bitcoin price, meaning not only is the revenue down, but many miners are in the red on their hardware investments. This is particularly painful for mining companies who levered up through increased debt in order to make these investments, getting hit twice as hard as interest rates have also been hiked. 

The other side of the equation has also gone against miners: cost. Russia invading Ukraine triggered an energy crisis, while inflation is rampant globally, even if it has come down since the peak last year. This has sent miners’ biggest expense, electricity, vertical – at the same time that the price of Bitcoin has fallen. 

Exacerbating this effect is the increase in hash power, which refers to the computing power on the Bitcoin network. This increases as more miners join the network, meaning there is greater competition and greater dollar outlay required of miners to fight for revenue. The hash rate is currently at all-time highs, putting a further squeeze on miners. 

The below chart shows how miners’s reserves jumped significantly during the bull market in USD terms, yet in BTC terms, not much was sold. In other words, miners were betting on Bitcoin continuing to rise – a fateful mistake given their ongoing revenue was already so tightly tied to the volatile asset. 

Ordinals protocol sees Bitcoin fees jump

Things picked up for miners this month when the emergence of the Ordinals protocol put Bitcoin block space at a premium, with Bitcoin fees jumping up as a result. The increased activity as a result of BRC-20 tokens launched within the Ordinals protocol, as discussed last week, was a welcome result for miners. 

Since then, however, fees have fallen back down. 

It wasn’t all bad news for miners, however. While fees were falling back down the earth, debt ceiling negotiations were ongoing in the US – and miners have been an unexpected benefactor. The US debt ceiling is an arbitrary number which limits US borrowing. If the ceiling is not raised, a default could be on the cards. In order to raise it, Democrats and Republicans must strike a deal, which means give and take on both sides. In other words, it has become a political game. As part of the continued negotiations, it appears that the proposed 30% tax on mining will be dropped. 

“One of the victories is blocking proposed taxes”, Republican Representative Warren Davidson tweeted in response to a question over whether the mining tax would be chopped. 

Earlier this month, the US administration proposed a tax on electricity used by crypto miners called the Digital Assets Mining Energy (DAME) excise act. A 10% tax on miners’ electricity usage would be introduced next year, slated to step up to 30% by 2026. The move came amid mainstream concern around the prohibitive energy use of mining and its impact on the environment.

It also came as the US continues to clamp down on the crypto industry as a whole, with an aggressive line taken by lawmakers since the start of 2023. High profile cases since the start of the year include Coinbase getting served with a Wells notice, the Binance-branded BUSD stablecoin being shut down, and Binance getting charged by the CFTC for a raft of allegations, including a failure to implement money laundering and anti-terrorist financing laws. 

Thus, the removal of the mining tax represents a small win for crypto amid what has been a raging storm, both within regulation and elsewhere. However, the road ahead remains perilous for miners. Bitcoin prices are still 60% off their highs, fees have normalised and hash power is at an all-time high.

Bitcoin has reclaimed the $40,000 mark in the last hour, following indications of progress in discussions between and Ukraine amid the ongoing conflict.

Russian President Vladimir Putin stated that “positive movement” was being made in the negotiations on a “daily basis.” Russia is facing penalties from Western countries, among others, as world leaders criticize the invasion of Ukraine.

Bitcoin Spikes Following Putin Remarks

The spike came in the wake of new comments from Russian President Vladimir Putin, who indicated in a meeting with his Belarussian counterpart, Aleksandr Lukashenko, that there had been “positive shifts” in the Ukraine dynamic.

Putin said improvements has been made in the talks between the Kremlin and Ukraine:

“There are certain positive shifts, negotiators on our side tell me.”

BTC/USD trades close to $40k. Source: TradingView

Putin’s remarks boosted global markets. Futures on the S&P 500 rose 1.31%, while futures on the tech-heavy Nasdaq 100 rose 1.65%. Sentiment in Europe was higher, with the DAX in Germany rising 3.41% and the Stoxx Europe 600 rising 2.09%.

At the time of writing, BTC/USD volatility remained high, with bulls aiming to break through $40,000 resistance more convincingly.

The increasing volatility had an effect on liquidations as well, with over $24 million in leveraged positions being wiped off the market in the last hour alone. The largest single liquidation order was on Bybit, worth about $6 million.

Explosive growth in #Bitcoin bitfinex shorts

hate to say it, capitulation incoming pic.twitter.com/FTQGt41UBQ

— Cole Garner (@ColeGarnerXBT) March 11, 2022

Related Reading | Bitcoin On Course To Hit $100K Nine Months From Now, Bitbull CEO Predicts

Traders Unsure Of Market

The cryptocurrency market remains volatile. Bitcoin rose from $38,600 in European morning hours to little more than $40,200 after Putin’s remarks were made public. Ethereum, XRP, and Solana’s SOL all gained 2.4% in the last hour, while Polkadot’s DOT led advances with an 8% rise in the last 24 hours.

However, it’s worth mentioning that Russian troops are rumored to be gathering around Kyiv, and some foresee a possible effort to encircle the capital.

Adam Cochran, a well-known crypto critic and analyst, commented on the contradicting signals, saying:

“Markets are so thin and so desperate for relief that we’re moving on vague positive news in the Russia-Ukraine conflict while both sides also release worsening statements and escalating action.”

Bitcoin stayed at the lower end of its established trading range, with the area north of $42,000 proving impossible to hold for long in 2022.

The latest price action, however, was a godsend for some traders, with popular Twitter account Anbessa informing followers that everything was going as planned.

$BTC/USD Update

bullish divergence playing out
4th entry -> 4 bounce up 3% pic.twitter.com/QqZnheFLyQ

— AN₿ESSA (@Anbessa100) March 11, 2022

The deterioration of Ukraine’s position has sent shockwaves through global markets. This week, India saw a massive outflow of foreign capital worth billions of dollars, while Brent crude hit $140 per barrel.

Related Article | Billionaire Investor Says Crypto Outlook Is ‘Very Bullish’ For Bitcoin