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Bitcoin Drops Amid Inflation Fears and Trade War Escalation

Bitcoin and broader crypto markets decline as inflation concerns and escalating trade tensions weigh on investor sentiment. Find out the latest developments.
Published on 2025-03-28

Economic Uncertainty Weighs on Markets

Bitcoin fell 3.9% to $83,866.6 on Friday, as a hotter-than-expected U.S. inflation report dampened hopes for earlier Federal Reserve rate cuts. The core PCE price index, the Fed’s preferred inflation gauge, rose 0.4% in February, exceeding expectations and reaching an annual rate of 2.8%. This stronger-than-anticipated inflation data has raised concerns about prolonged price pressures, especially amid escalating global trade tensions.

Trade War Escalation Intensifies Market Volatility

President Donald Trump’s announcement of a 25% tariff on foreign-made cars and auto parts, effective April 2, has heightened fears of a full-blown trade war. Canadian Prime Minister Mark Carney responded by declaring the U.S.-Canada trade relationship "over" and vowing retaliation. These developments have led to a broader risk-off sentiment, with global stock markets experiencing significant declines. Investors are shifting away from volatile assets like cryptocurrencies, favoring traditional safe-haven assets such as gold, which hit record highs in Asian trading.

Grayscale Seeks Spot Avalanche ETF Approval

Grayscale has filed with the SEC to launch a spot Avalanche (AVAX) ETF on Nasdaq, offering a more cost-effective way for investors to gain exposure to AVAX. If approved, this ETF could provide an alternative to Grayscale’s existing Avalanche Trust, which currently charges a 2.5% management fee. However, the SEC has yet to approve any spot altcoin ETFs beyond those tied to ether.

Crypto Market Sees Broad Declines

The broader crypto market experienced significant declines, with most altcoins falling more sharply than Bitcoin. Ethereum dropped 6% to $1,880.67, while XRP, Solana, and Cardano also saw declines of 6.5%, 6.7%, and 5%, respectively. Polygon plunged nearly 10%, and meme tokens like Dogecoin and $TRUMP also suffered losses of 5.8% and 8%. AVAX, currently trading at $20.16, fell around 8% over the past 24 hours amid the broader market downturn.

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