The cryptocurrency market faces a sudden drop amid global instability

Over the past 48 hours, the cryptocurrency market has experienced a sudden plunge as investors lowered expectations amid new tariff threats. Bitcoin is currently trading around $83.12K, sharply down from higher levels, while Ether dropped to $2.73K. This decline is not due to internal factors within the crypto market but stems from increasing global macroeconomic concerns, especially around the trade policies of U.S. President Donald Trump.

Bond yields send warning signals

The current instability began in the government bond markets. The yield on the 10-year U.S. Treasury bond surged to its highest level in nearly half a year, a sign often indicating concerns about recession or rising inflation expectations. As investors demand higher compensation to hold government debt, this reflects the perceived risk level by the market.

The total market capitalization of cryptocurrencies has shrunk to approximately $2.71 trillion, down from nearly $3 trillion a week ago. Compared to the peak in October 2025, the market has lost about 32% of its value, illustrating the scale of the ongoing correction.

Other assets outperform in the flight to safety

As investors withdraw from cryptocurrencies, they are not moving into other risky assets. The S&P 500 index fell 1.9%, indicating widespread caution in the stock market. Instead, gold has become the preferred destination, soaring to new record highs. Silver also saw an impressive increase of about 64% since December, pushing its market cap to around $5.3 trillion.

This shift clearly shows: when the world enters a period of uncertainty, investors lose confidence in digital assets and turn to traditional safe havens like precious metals.

Global reactions amplify market tensions

Billionaire investor Ray Dalio warned that the global economy may be entering a “new phase of financial conflict.” According to him, geopolitical disputes are not only affecting trade but also spreading to capital flows and global asset allocation decisions.

European Commission President Ursula von der Leyen added fuel to the fire on Tuesday, stating that the EU will respond to any U.S. measures in a “resolute, unified, and proportionate” manner. This statement heightens concerns over a prolonged trade confrontation with broader economic impacts.

Shock from Japanese bond market spreads globally

Macroeconomic concerns intensified as the yield on Japan’s 20-year government bonds surged to record highs. This event shocked markets because Japan is one of the most heavily indebted economies in the world, with public debt exceeding 200% of GDP.

Speculation about an unexpected election — potentially giving Prime Minister Sanae Takaichi the power to expand economic stimulus — has shaken the bond markets. TD Securities warned that the rising yields in Japan have spilled over into bond markets in the U.S., U.K., and Canada, calling it a “warning sign” that global bond markets could experience rapid price adjustments.

Bitcoin and Ether: Underperforming compared to other assets

Bitcoin currently ranks 8th among the world’s largest traded assets with a market cap of nearly $1.8 trillion. However, major corporations like Saudi Aramco and Taiwan Semiconductor Manufacturing Company continue to narrow the gap.

Ether is more vulnerable. With a market value of about $329.82 billion, ETH has fallen to the 42nd position globally, behind companies like Home Depot and Netflix. This ranking reflects the reality that during turbulent times, digital assets are less favored than gold or large-cap stocks.

Recovery path depends on geopolitical negotiations

Bitcoin’s ability to regain the $95,000 level and Ether’s prospects to return to $3,300 seem heavily dependent on President Trump reaching some form of compromise with European leaders in the high-level negotiations scheduled for this week.

Until clear political signals or stronger monetary moves emerge, analysts say the crypto market is likely to continue maintaining a defensive stance. Trading will remain driven by global macroeconomic developments rather than internal industry factors.