Bitcoin Recovers Losses Amid Dip Buying and Regulatory Uncertainty

Bitcoin Recovers Losses Amid Dip Buying and Regulatory Uncertainty

Bitcoin showed signs of recovery on Tuesday, trimming some of its recent losses as dip buyers took advantage of the price slump. The cryptocurrency, which had dropped to a session low of $81,617, rebounded slightly to $87,819 at 2:28 p.m. ET. This volatility comes amid mixed reactions to President Trump's recent crypto initiatives and lingering concerns over global economic growth due to tariff disputes.

Trump's Crypto Policies Spark Hope and Confusion

Bitcoin and the broader crypto market had initially surged after Trump announced plans to include Bitcoin and Ether in a national crypto reserve. However, the lack of clarity on how this reserve will be funded and structured has dampened enthusiasm. Trump's track record with crypto, including the underperformance of his $TRUMP meme token, has also raised skepticism among investors.

Tariff Jitters Weigh on Risk Appetite

The U.S. President's decision to impose tariffs on China, Canada, and Mexico has heightened economic uncertainty. While these tariffs do not directly impact crypto markets, they have eroded investor confidence, pushing many toward safer assets like gold and the Japanese yen. This risk aversion has contributed to crypto's prolonged losing streak since mid-February.

Ark Invest Shifts Holdings

Cathie Wood's Ark Invest made notable moves in its latest portfolio rebalancing. The firm purchased $8 million worth of Coinbase shares for its Next Generation Internet ETF (ARKW), while selling $8.2 million of its spot Bitcoin ETF (ARKB). This marks a strategic shift in its exposure to the crypto sector, with Coinbase now representing 6% of ARKW's holdings.

Broader Crypto Market Sees Rebound

Altcoins followed Bitcoin's lead, with Ether climbing 2% to $2,167.74 and XRP gaining 6% to $2.49. Solana and Cardano, also named in Trump's reserve plan, rose 11% and 0.6%, respectively. Meme tokens like Dogecoin and $TRUMP saw modest gains of 1% and 1.5%, reflecting cautious optimism in the market.

Despite the rebound, uncertainty over regulatory frameworks and global economic headwinds continues to influence crypto prices. Investors are eagerly awaiting the White House Crypto Summit on Friday for potential clarity on Trump's crypto policies.