The U.S. economy shrank by 0.3% in Q1 2025, linked to Trump’s tariffs. Traditional markets fell, while Bitcoin saw a slight dip but increased trading volume. Futures data indicates hesitancy among traders, waiting for market clarity.
In a surprising turn of events, the U.S. economy has contracted by 0.3% in the first quarter of 2025, according to a report released by the U.S. Department of Commerce. The contraction is attributed to companies rushing to import goods ahead of President Donald Trump’s tariffs imposed during his global trade war, leading to this unexpected decline. Economists have pointed at Trump’s policies as a significant factor contributing to the drop in gross domestic product (GDP), which is vital as it reflects the total value of goods and services produced in the economy.
On Wall Street, the news resulted in a notable downturn, with the S&P 500, Nasdaq, and Dow Jones Industrial Average seeing losses of 0.91%, 1.27%, and 0.61% respectively. As for Bitcoin, it took a slight hit too. Throughout the early parts of the day, Bitcoin (BTC) was seen fluctuating around $94,000, but had dropped to around $93,721.16 as the day wore on, according to insights from Coinmarketcap. This represents a modest 1.48% dip in the last 24 hours, albeit a slight increase of 0.75% over the past week.
Despite the decline in price, trading activity for Bitcoin surged, with 24-hour trading volumes up by 26.22%, hitting approximately $30.67 billion. Market capitalisation was, however, down by 1.03%, bringing it to about $1.86 trillion. Yet, on a more positive note, Bitcoin managed to bolster its dominance over the wider cryptocurrency market, gaining 0.50 percentage points to reach 64.75%.
When looking at Bitcoin futures, the situation appears to reflect some steadiness. Data from Coinglass suggests total open interest for BTC futures reached $62.48 billion, showing a slight 0.02% increase within the last day. Interestingly, liquidation activity was minimal, just $276,630, divided roughly between long and short positions. This equilibrium indicates traders are feeling uncertain, which aligns with the current sideways price trends for Bitcoin, as many look for clearer signals about where the cryptocurrency could be headed next.
Trump, maintaining his characteristic defiance, responded to the GDP report by shifting blame onto his predecessor, stating, “We have to get rid of the Biden overhang.” He claimed the current economic struggles are unrelated to tariffs, insisting that the economic boom is imminent and will be unprecedented. It seems many investors are watching closely, hoping for clearer guidance amid this fluctuating economic landscape.
