This was the sharpest decline in over two years, pulling valuations below levels seen throughout most of the 2021–2022 cycle. However, the sell-off was far from uniform.

While Bitcoin has shed less than 20% at the beginning of April, altcoins have experienced a 41% wipeout, underscoring a distinct capital flight towards more established digital assets.

Most recently, Bitcoin has managed to recover and even set a new all-time high, surpassing the critical $110,000 mark on 21 May. At the same time, other crypto majors—notably, Ethereum and XRP—continue to trade substantially below their recent peaks (see the chart below).

As capital retreated from riskier altcoins, investor sentiment has soured, prompting Coinbase to warn of an emerging ‘crypto winter’ scenario. Global broker Octa, active in digital asset transactions, sees this as a decisive phase of risk reallocation, with traders seeking clarity before any meaningful return to risk.

Major crypto coins’ performance in 2025

Several stress points are converging:

• Venture capital (VC) funding, though up from Q4 2024, remains 50–60% below 2021–22 levels.
• Liquidity conditions are tightening, particularly for smaller projects.
• Macro headwinds—including rising global tariffs and macroeconomic uncertainty—have paralysed risk appetite.

More speculative corners of the market, such as tokens used for Decentralized Physical Infrastructure Networks (DePINs), memecoins and coins used for Artificial Intelligence (AI) agents, have been hardest hit. Their underperformance highlights growing investor caution.

Kar Yong Ang, a financial market analyst at Octa broker, explains: ‘As of right now, the market clearly sees more value in Bitcoin vs the rest of the crypto universe.

The global macroeconomic situation is highly unstable, with tariffs drama still unfolding and rising protectionism potentially threatening the U.S. dollar’s reserve currency status. As a result, investors’ capital has migrated from high-risk crypto space like alt-coins into relatively low-risk Bitcoin. In fact, Bitcoin has become a sort of “safe-haven coin” of the crypto market’.

Indeed, broader financial markets have become increasingly concerned about the deteriorating U.S. twin deficits (fiscal and trade), both of which are on an unsustainable trajectory.

The yields on the U.S. 20-year government bonds rose above 5.15% on 22 May, almost a two-year high, while the U.S. Dollar Index (DXY) dropped below the critical 100 mark, reflecting eroding confidence in the USD’s safe-haven status.

Furthermore, ratings agency Moody’s downgraded the U.S. sovereign rating, one notch down from ‘Aaa‘ to ‘Aa1‘ due to concerns about the nation’s growing debt. Concurrently, most cryptocurrencies continue to act as high-beta proxies for global sentiment, and in today’s global macroeconomic environment, that sensitivity is proving to be a significant headwind.

Tariff disputes between the U.S. and China, macroeconomic uncertainty, and declining equity market performance are all contributing to a reduction in overall risk appetite, thereby negatively impacting most cryptocurrencies. However, Bitcoin appears to be a major exception in this regard.

Kar Yong Ang explains:

‘At first, the BTC rally appeared to be highly speculative: the market had positively reacted to Trump’s softer stance towards the Federal Reserve (Fed) Chairman and U.S.-China trade deal. Later, however, Bitcoin became the only major crypto coin to set a new all-time high. It suggests a continuing flight to perceived safety within the crypto universe, while alt-coin flows remain diminished’.

Still, the ongoing macroeconomic uncertainty and potential failure of the U.S. to resolve its trade tensions with China and the European Union (EU) could act as an immediate catalyst, potentially triggering a renewed bearish phase for Bitcoin.

Just recently, U.S. President Donald Trump’s threat to impose 50% tariffs on the EU triggered a classical risk-off move—a sell-off in BTCUSD and a rally in XAUUSD.

Traders and long-term investors should keep a close eye on:

• the total market cap, excluding BTC
• fluctuations in VC funding
• headlines impacting regulatory frameworks in the U.S., EU, and Southeast Asia
• any news related to the ongoing trade disputes and the possibility of trade negotiations.

Tactical patience will be essential this summer. Rushing in to buy Bitcoin now may be unwise, but carefully buying the dips is more reasonable. Key levels to watch are 105,000, 98,000, 94,000, 89,000, and 84,000.

Compliance reminder: trading Contracts for Difference (CFDs) carries a high level of risk and may not be suitable for all investors. Emotional trading can increase this risk. Always trade within your means and understand the risks involved.

Disclaimer: This article does not contain or constitute investment advice or recommendations and does not consider your investment objectives, financial situation, or needs. Any actions taken based on this content are at your sole discretion and risk—Octa does not accept any liability for any resulting losses or consequences.

Octa is an international broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services used by clients from 180 countries who have opened more than 52 million trading accounts. To help its clients reach their investment goals, Octa offers free educational webinars, articles, and analytical tools.

The company is involved in a comprehensive network of charitable and humanitarian initiatives, including the improvement of educational infrastructure and short-notice relief projects supporting local communities.

Since its foundation, Octa has won more than 100 awards, including the ‘Most Reliable Broker Global 2024’ award from Global Forex Awards and the ‘Best Mobile Trading Platform 2024’ award from Global Brand Magazine.

Given the length of the campaign and the public nature of his platform, one would think that the market had plenty of time to prepare and price in the potential policy shifts well in advance.

However, it turned out that investors were caught off guard by the extent of the upheaval that ensued.

Indeed, the first 100 days of Donald Trump’s presidency were characterised by extreme volatility and uncertainty for the global financial markets.

In this article, Octa broker reviews Trump’s policies and analyses their consequences for the global financial markets.

Introduction

Donald Trump assumed office on 20 January 2025, and market volatility has been rising ever since.

Some of Trump’s initiatives, particularly his aggressive trade policies, have sent shockwaves through equities, currencies, and commodities, leaving retail forex traders scrambling to adjust.

Meanwhile, larger investors struggled to adapt to the rapid pace of proposed reforms and their far-reaching consequences.

Overall, the first 100 days of President Trump saw heightened risk aversion and widespread uncertainty, which resulted in sharp fluctuations in asset prices and currency exchange rates as traders reacted to every policy announcement, tweet, and speech from President Trump and his new administration. Below is a list of just a few of the notable days that shook the markets. 

Major currencies’ performance since Donald Trump took office

Image

Source: Octa

Major market-moving events

1). 20 January. The U.S. Dollar Index (DXY) dropped by more than 1.20% after news surfaced that the new administration will not immediately impose trade tariffs, prompting a rally in the currencies of some U.S. trading partners: notably, the Mexican peso (MXN), the Euro (EUR) and the Canadian dollar (CAD).

It should be noted that prior to the sharp decline, the greenback had been rising almost uninterruptedly since September 2024, almost reaching a three-year high ahead of Trump’s inauguration as the market assumed that higher tariffs would spur inflation, prompting the Federal Reserve (Fed) to pursue a more hawkish monetary policy.

2). 1–3 February. In the future, historians may label 1 February as the official start of a global trade war.

On this day, Donald Trump imposed a 25% tariff on imports from Canada and Mexico, along with an additional 10% tariff on China.

The market’s reaction was highly negative. U.S. stock futures slumped in early Asian trading on Monday, 3 February, with Nasdaq futures down 2.35% and S&P 500 futures 1.8% lower. U.S. oil prices jumped more than $2, while gasoline futures jumped more than 3%.

Meanwhile, the Canadian dollar and Mexican peso weakened substantially, with USDCAD surging past the 1.47900 mark, a 22-year high, and USDMXN touching a 3-year high as economists warned that both countries were at risk of recession once the tariffs kick in.

Later that day, Trump agreed to delay 25% tariffs on Canada and Mexico for a month after both countries agreed to take tougher measures to combat migration.

3). 3–5 March. This is when the market began to seriously worry about the health of the global economy and a risk-off sentiment became evident.

As fresh 25% tariffs on most imports from Mexico and Canada, along with the 20% tariffs on Chinese goods, were scheduled to take effect on 4 March, investors started to sell-off the greenback and flock into gold (XAUUSD) as well as into alternative safe-haven currencies, such as the Swiss franc (CHF) and the Japanese yen (JPY).

In just three trading sessions (from 3–5 March), DXY plunged by more than 3% while the gold price gained more than 2%.

4). 6 March. Donald Trump signed an executive order establishing a U.S. cryptocurrency reserve. However, it was unclear how exactly this reserve would work and just how much it would differ from Bitcoin holdings already in place.

Many crypto enthusiasts were disappointed, which triggered a five-day downturn in BTCUSD, culminating in Bitcoin briefly dipping below the crucial $80,000 level on 10 March.

5). 2 April. The trade war entered the next stage when Trump unveiled his long-promised ‘reciprocal’ tariffs strategy, essentially imposing import duties on more than a hundred countries.

The market route began with equity markets losing billions of dollars in valuation. S&P 500 lost more than 11% in just two days, while DXY dropped to a fresh six-month low.

6). 9–11 April. Trade war drama continued to unfold. Financial markets were stunned by President Trump’s abrupt reversal on tariffs.

Duties on trading partners, which had taken effect less than 24 hours prior, were largely rolled back as the President announced a 90-day freeze on the reciprocal tariffs. However, a 10% blanket tariff was still applied to most nations.

In contrast, the trade conflict with China escalated sharply. Following China’s 84% retaliatory tariff on U.S. goods, the U.S. increased tariffs on Chinese imports to 125%. This, combined with existing duties, brought the total U.S. tariff burden on Chinese imports to 145%.

Kar Yong Ang, a financial market analyst at Octa broker, comments:

‘I will remember that day for a long time. Traders were stunned by Trump’s sudden U-turn on trade policy and really struggled to make sense of it all. A knee-jerk reaction was to simply buy gold and ask questions later.‘

Apart from country-based tariffs, Trump also introduced additional import tariffs on aluminium and steel and ordered a probe into duties on copper imports.

Overall, his aggressive trade policies have fueled speculation about the global recession, which explains why gold has been one of the best-performing assets since Trump took office.

Kar Yong Ang comments: ‘We are dealing with a rather unusual situation. Even a global depression is not out of the question as tariffs may disrupt supply chains, hurting global output while also contributing to stronger inflationary pressure. This will certainly complicate monetary policy decisions. If I were to describe Trump’s first 100 days in just two words, it would be “run for safety”.’

Indeed, Trump’s recent public criticism of Jerome Powell, the Fed’s Chairman, added more fuel to the fire of nervous investor sentiment.

Overall, the full effect of Trump’s policies is yet to materialise, but the potential impact on global trade and the macroeconomy is substantial.

The IMF, citing escalating trade tensions, downgraded its 2025 global growth forecast to 2.8% and warned of potential stock market crashes and a 7% contraction in the world economy should trade wars persist.

Although Scott Bessent, the U.S. Treasury Secretary, hinted at de-escalating U.S.-China trade tensions, it is clear that investors should still get used to living in a period of heightened volatility and uncertainty.

Kar Yong Ang has this advice for an average retail trader: ‘Focus more on short-term trades with tight stop-losses as opposed to long-term position-trading, cut exposure to U.S. equities, diversify into gold and other safe-haven currencies like Swiss franc and most importantly, keep your mind clear and be ready to quickly switch from one position to another’.

Compliance reminder: trading Contracts for Difference (CFDs) carries a high level of risk and may not be suitable for all investors. Emotional trading can increase this risk. Always trade within your means and understand the risks involved.

Octa is an international broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services used by clients from 180 countries who have opened more than 52 million trading accounts. To help its clients reach their investment goals, Octa offers free educational webinars, articles, and analytical tools.

The company is involved in a comprehensive network of charitable and humanitarian initiatives, including the improvement of educational infrastructure and short-notice relief projects supporting local communities.

Since its foundation, Octa has won more than 100 awards, including the ‘Most Reliable Broker Global 2024’ award from Global Forex Awards and the ‘Best Mobile Trading Platform 2024’ award from Global Brand Magazine.

Finance, which remains one of the top three sectors with the highest AI penetration, according to Statista and PwC, is no exception. Corporations and retail traders are expected to accelerate AI deployment to increase productivity while carefully mitigating the risks of overreliance on algorithms.

In this material, Octa, a broker with globally recognised licenses, shares insights on how AI in trading will evolve in 2025.

Emerging AI trends in trading for 2025

Machine learning continues to redefine the trading landscape by enhancing the speed and precision of market analysis. The 2024 IMF Global Financial Stability Report, Chapter 3, highlights that advancements in artificial intelligence are poised to improve market efficiency.

To be more precise, AI-driven tools are expected to enable faster portfolio rebalancing and more efficient processing of large trades in asset classes like equities and bonds.

However, the IMF also notes the potential risks associated with these technologies, such as heightened volatility during market stress.

Neural networks, particularly large language models (LLMs), have shown immense potential for sentiment analysis in trading. Since their introduction in 2017, the share of AI-related patent applications in algorithmic trading has surged from 19% to over 50% annually.

The tools are already deployed to process market sentiment from news and social media in near real-time, offering traders insights into geopolitical developments and economic forecasts.

Algorithmic trading has grown substantially, with AI-driven systems enabling faster execution and reduced operational errors.

High-frequency trading powered by AI has seen significant adoption, particularly in liquid asset classes such as equities and derivatives.

While detailed statistics on future adoption rates remain speculative, the World Trade Organization’s focus on the digital transformation of markets underscores the increasing reliance on automation to enhance trading efficiency and liquidity.

Opportunities for traders in 2025

AI’s capacity to process sizable quantities of historical and real-time facts allows investors to benefit from predictive insights that had been formerly inconceivable.

Advancements in AI-powered predictive analytics are changing how we forecast international markets by making predictions more accurate and providing clear, actionable insights.

These tools are transforming financial markets, helping investors spot trends and respond to changes with greater confidence.

Emotions can often get in the way of smart trading decisions, especially when markets are highly volatile. AI helps solve this problem by relying purely on data and predictive models for decision-making.

According to the IMF’s Global Financial Stability Report, AI-driven tools are already helping retail traders manage risks more effectively and avoid impulsive trades that could lead to losses.

As AI tool costs decrease, features like real-time portfolio optimisation and automated trading strategies are becoming accessible to individual traders.

Previously available only to large financial institutions, these advanced tools are levelling the playing field, enabling retail investors to trade with more confidence and accuracy.

Risks and challenges in AI integration

AI-driven business strategies come with inherent risks. The IMF warns that over-reliance on algorithmic models could increase market volatility during a global crisis.

For example, AI-driven exchanges exhibited herd-like behaviour during the March 2020 market turmoil.

This resulted in significant price volatility and required a robust regulatory mechanism to manage the risks involved.

The integrity of AI systems faces increasing security challenges. Research shows that the effectiveness of AI models depends on data quality and security.

Recent statistics reveal an alarming trend: cyber threats targeting AI are increasing by 47%. The industry requires robust security measures to protect the algorithms against data manipulation and unauthorised access.

While AI offers tremendous value, its complexity poses a challenge for low-tech businesses. The complexity of advanced AI systems makes it crucial to have accessible training resources and intuitive interfaces.

These tools help traders, especially newcomers, understand and use AI effectively, paving the way for broader adoption across trading communities.

Preparing for AI-driven transformation

Thriving in an AI-pushed trading environment requires specific training. Otherwise, traders risk facing sophisticated systems they can’t properly handle or misusing AI-based tools, consequently missing out on their benefits.

To prepare for future AI tools, traders should try the available software now.

The safest option is to test AI deployment when trading on a demo account. This option is available on trading platforms provided by global brokers like Octa.

For example, Octa broker currently uses AI to facilitate graph analysis and boost pattern identification when conducting technical analysis. Following the increased AI adoption trend, the company will likely keep embedding more AI-based tools on the platform.

Final Word

AI is set to further redefine trading in 2025. From enhanced predictive analytics to democratising organisational productivity tools, the technology enables traders to make smarter, faster decisions. However, sustainable usage should remain at the core.

One should be aware of risks such as over-reliance on algorithms and data security. To mitigate these risks, a reasonable strategy would be to combine AI-based analytics with human market monitoring and decision-making.

AI should be perceived as a convenient tool rather than a magic pill for making accurate trading decisions.

Octa is an international broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services already utilised by clients from 180 countries who have opened more than 42 million trading accounts.

The company is involved in a comprehensive network of charitable and humanitarian initiatives, including the improvement of educational infrastructure and short-notice relief projects supporting local communities.

In the APAC region, Octa received the ‘Most Secure Broker Indonesia 2022’ and the ‘Most Reliable Broker Asia 2023’ awards from International Business Magazine and Global Forex Awards, respectively.

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