The crypto market is on high alert ahead of April 2, a date some analysts are calling “the biggest event of the year by an order of magnitude.” Macro economist Alex Krüger (@krugermacro), warns that President Donald Trump’s upcoming announcement of new reciprocal tariffs could deliver a seismic jolt to global markets — including crypto.

Why April 2 Is Massive For Crypto

In a post shared on X, Krüger describes the looming announcement, which the president has dubbed “Liberation Day,” as “10x more important than any FOMC” meeting: “April 2nd is similar to election night. It is the biggest event of the year by an order of magnitude. 10x more important than any FOMC, which is a lot. And anything can happen.”

According to Krüger, Trump might choose one of several paths: “Trump could go soft, in which case markets would rally fast and furiously. Or could go half-way, adding uncertainty on timelines, in which case markets would take out the stops of all longs and shorts. Or go all out, in which case markets could easily crash another 10% to 15%, fast.“

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Krüger also suggests that “the US economy is still strong, but will highly likely slow down due to tariffs regardless of the path Trump chooses.” Nevertheless, he notes that many economists have already factored in a sharp year-end slowdown. He stresses that April 2 could mark the peak of market anxiety, aligning with the arrival of US Tax Day just two weeks later. “Either way, you all want to be prepared and ready to act on ‘Liberation Day.’ It will be big.”

Trump’s “Liberation Day” announcement will reportedly focus on “reciprocal tariffs” targeting specific countries or blocs deemed to maintain unfair trade barriers. Although this strategy appears “more targeted than the barrage he has occasionally threatened,” officials familiar with the matter believe it could still prove far-reaching.

President Trump has repeatedly signaled that these tariffs would be significant. Citing trade disparities with nations such as the European Union, Mexico, Japan, South Korea, Canada, India, and China, he asserts the US has been treated unfairly for too long. In remarks from the Oval Office, he declared: “April 2nd is going to be liberation day for America. We’ve been ripped off by every country in the world, friend and foe.”

Worst Case Scenario

Aides and allies suggest that while some countries may be excluded, Trump is looking for immediate impact. Tariff rates could take effect right away, adding to market fears of spiraling retaliation. In this case, Krüger says: “In worst case scenario sh*t would hit the fan then tariffs would start coming off as Trump negotiates hard in the following month, in which case peak negativity would hit around week 2 of April, which would coincide with US Tax Day.”

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Senior officials, including National Economic Council Director Kevin Hassett and Treasury Secretary Scott Bessent, have indicated that the administration is focusing on a “dirty 15” group of countries where tariff and non-tariff barriers are allegedly most egregious. Hassett recently remarked, “It’s not everybody that cheats us on trade, it’s just a few countries, and those countries are going to be seeing some tariffs.”

For the crypto market, global macroeconomic events have increasingly played a pivotal role in price action in recent weeks. The April 2 “Liberation Day” announcement arrives at a time when digital asset traders already face headwinds from monetary policy shifts and a slowing global economy. Krüger believes that if the tariffs come in softer than expected, “markets would rally fast and furiously.” On the other hand, a maximalist tariff approach could deliver a significant shock, potentially denting cryptocurrencies.

At press time, the total crypto market cap stood at $2.81 trillion.

Featured image from iStock, chart from TradingView.com

The crypto industry received a significant legal victory as Ripple CEO Brad Garlinghouse announced on March 19 that the U.S. Securities and Exchange Commission (SEC) had officially dropped its appeal against the company. The announcement came in a video posted on social media platform X, where Garlinghouse noted the regulatory agency’s decision to end its pursuit of further litigation.

Besides this interesting development, another major financial development has taken center stage in the crypto market in the past 24 hours; the outcome of the Federal Reserve’s latest meeting. 

Fed Keeps Interest Rates Steady Amid Uncertainty

The outcome of the latest Fed meeting can be divided into six key decisions. First, the Federal Reserve opted to maintain interest rates at their current level, keeping the borrowing rate in a range between 4.25% and 4.5% for the second consecutive meeting. This decision is part of a continued pause in the Fed’s tightening cycle. 

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Secondly, the Fed noted that uncertainty surrounding the economy has increased, and third, the Fed’s updated projections were the shift in expectations for rate cuts in 2025. The median forecast suggests 50 basis points of cuts for the year, but a growing number of Fed officials are less convinced that rate reductions will be necessary. In December, only one official anticipated no rate cuts in 2025. However, there’s now a more divided outlook, and that number has now risen to four, as noted in a post on social media platform X by analysts at The Kobeissi Letter.

Beyond interest rates, the Fed revised its economic growth projections downward for 2025, suggesting that policymakers see slower expansion ahead. This adjustment comes alongside an increase in the Fed’s inflation forecast for the same period, reflecting concerns about price pressures persisting longer than previously anticipated. With inflation remaining a key focus, the central bank is treading carefully as it evaluates the right time to pivot toward a looser monetary stance.

Fourthly, the Fed announced that it would slow the pace of its balance sheet runoff beginning in April. This is alongside a sharp reduction in the Fed’s 2025 growth projections and a markup in their 2025 inflation forecast.

Implications For Crypto Markets And Digital Assets

For the crypto industry, the Fed’s decision to hold rates steady and its mixed messaging on future cuts introduce a dynamic situation to Bitcoin and others. The fact that the Fed is still concerned about inflation and economic uncertainty shows that the path to more accommodative policies regarding the crypto industry may not be as smooth. 

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However, if the Fed stays hesitant to cut rates and economic growth slows as projected, digital assets may face headwinds later in the year, which may slow down the predicted growth by crypto analysts.

Featured image from Unsplash, chart from Tradingview.com

US President Trump’s outspoken acceptance of near-term economic hardship has placed risk assets—including Bitcoin (BTC) and the broader crypto market—under mounting pressure. According to a thread by The Kobeissi Letter on X, President Trump’s strategy revolves around tolerating significant “short term pain” in order to drive down inflation and facilitate the refinancing of over $9 trillion in US debt.

Will Crypto Survive Trump’s ‘Short-Term Pain’ Strategy?

The impact on cryptocurrencies has been immediate and pronounced. While US equities have shed an estimated $5 trillion in market value this year, digital assets have also suffered steep losses. Since President Trump’s inauguration on January 21, Bitcoin (BTC) has declined by approximately -23%, Ethereum (ETH) has tumbled by roughly -43% and the broader crypto market has experienced even more dramatic price drops.

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Although high volatility is nothing new in crypto, the synchronized downturn suggests that crypto assets are not immune to macroeconomic forces. The Kobeissi Letter adds, “Based on our research, President Trump made this conclusion BEFORE inauguration. However, he began formally articulating it on March 6th. Below is the headline that destroyed investor confidence in 2025. President Trump is no longer the ‘stock market’s President’ (for now).”

The Kobeissi Letter points to March 9 as the date President Trump further confirmed his stance by noting that America is in a “period of transition” and that it will “take a little time,” implying a willingness to tolerate near-term market turbulence. During this period, Commerce Secretary Lutnick’s statement on March 6—“Stock market not driving outcomes for this admin”—was followed by Treasury Secretary Bessent’s remark, “Not concerned about a little volatility.”

Although The Kobeissi Letter’s analysis notes that the administration’s viewpoint solidified before inauguration, it cites President Trump’s urgent focus on the year 2025, when $9.2 trillion in US debt will either mature or need to be refinanced. The thread states, “First, as we have previously noted, the US is facing a massive refinancing task. In 2025, $9.2 TRILLION of US debt will either mature or need to be refinanced. The quickest way to LOWER rates ahead of this colossal refinancing would be a recession.”

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Beyond debt concerns, The Kobeissi Letter also highlights the administration’s drive to reduce oil prices and the US trade deficit as part of the same economic calculation. Since President Trump took office, oil has fallen by over 20%. “Furthermore, a clearly defined part of President Trump’s strategy has been to LOWER oil prices. Oil prices are down 20%+ since Trump took office. This morning, Citigroup said oil prices falling to $53 would lower inflation to 2%. What would lower oil prices? A recession.”

Meanwhile, the administration’s extensive use of tariffs, which The Kobeissi Letter describes as “levying tariffs on almost ALL US trade partners,” is chipping away at GDP growth estimates, further hinting that a deliberate slowdown is in motion.

The Kobeissi Letter also notes, “On top of this, DOGE and Trump are attempting to cut TONS of government jobs. These are the same jobs that have accounted for much of the recent job ‘growth’ in the US. Government jobs have risen by 2 million over the last 4.5 years. Cutting these jobs will spur a recession.” DOGE leader Elon Musk appears resigned to short-term declines. Even after Tesla (TSLA) recorded its seventh-largest historical drop on March 10, Musk posted that “It will be fine long-term.”

For crypto traders and investors, the “short term pain” scenario by Trump is currently dictating the price action. The question, the analysts from The Kobeissi Letter posit, is whether this will lead to a more favorable economic landscape in the long run. “Is the ‘short term pain’ worth the ‘long term gain’ in President Trump’s economic strategy?”.

At press time, the BTC price remained under heavy downward pressure and traded at $82,000.

Featured image from Shutterstock, chart from TradingView.com