Investors’ Appetite for Risk is Waning, Severely Impacting Cryptocurrencies. The Market Evaluates Trump’s Promises. End of March Crucial for Cryptocurrency Market.
Investor uncertainty has emerged regarding overall U.S. presidential policies, especially those concerning tariffs imposed in trade wars with various countries. This increasing uncertainty is particularly evident in cryptocurrencies and U.S. stock indices.
“Investors dislike such elevated uncertainty, particularly when it involves risky and speculative assets like cryptocurrencies,” commented Maksymilian Kuch, equity market analyst at XTB, in an interview with MarketNews24. “While Bitcoin attempts to maintain its position as the leading cryptocurrency, other cryptocurrencies are experiencing strong downward trends, entering bear market territory.”
President Trump had made numerous promises to the cryptocurrency sector—both companies and crypto holders—but fulfillment of these promises has so far been poor. In response, the U.S. president decided to organize a special one-day conference involving companies active in cryptocurrencies.
A potential market boost was expected from the possibility of the United States becoming a holder of cryptocurrencies. However, the head of the Federal Reserve has clearly stated that the U.S. central bank has no intention of including Bitcoin in its reserves, choosing instead to maintain reserves in gold and traditional currencies. Nevertheless, the U.S. might follow the example of Arab countries by establishing an institution capable of purchasing cryptocurrencies, potentially similar to the popular Norwegian investment fund. Projects partly financed through cryptocurrencies could also emerge.
Contradictory information has surfaced regarding whether such U.S. reserves would include multiple cryptocurrencies or only Bitcoin. These conflicting reports originated from the White House.
“This uncertainty made it difficult to predict if cryptocurrency demand would increase,” explained the XTB expert. “It’s possible the reserves would only include Bitcoins already owned by the U.S. government, a scenario distinctly different from the government starting to buy Bitcoin.”
The introduction of Bitcoin ETFs has already influenced the market by reducing price volatility, with the recent 30% correction being an exception. After SEC approval for such funds, BlackRock—the largest ETF manager—recommended individual investors allocate 1-2% of their capital primarily to Bitcoin, with a smaller portion in Ethereum.
Memecoins, meanwhile, could serve as an interesting indicator of risk appetite but primarily remain lottery-like investments, often experiencing a dramatic initial spike without returning to previous levels.
“A key date for the entire cryptocurrency market is now the end of March due to changes in how quarterly results are presented by companies, something that might have gone unnoticed in Poland,” said M. Kuch of XTB. “New accounting rules took effect in the U.S. starting January 1. Companies holding Bitcoin in their reserves can report profits resulting from market prices exceeding those at the start of the year—above $96,000. This could lead many Wall Street firms to report unprecedented earnings from cryptocurrencies held in their reserves.”
