Crypto Slump On Trump Tariff Sparks COVID Crash Comparisons: Here's How They Compare

• The recent tariff-induced cryptocurrency market rout has sparked COVID-19 crash comparisons.
• The March 2020 COVID-19 market crash was one of the worst on record for the cryptocurrency market.
• Bitcoin and the broader cryptocurrency market may still have further to fall.

The past few weeks have been turbulent for cryptocurrency markets. President Donald Trump‘s “reciprocal tariffs” last week only intensified the situation.

Bitcoin, the largest cryptocurrency by market capitalization, has tanked as much as 16% since the announcement to trade at five-month lows below $75,000. Ethereum, the second largest cryptocurrency, has had it worse, falling as much as 28% to nearly $1,400, levels not seen since March 2023.

Amid the market rout, many are comparing the current situation to the infamous COVID-19 crash, but how do they compare?

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Another COVID Crash?

As Bitcoin tanked roughly 8% from over $81,000 to about $74,500 early on Monday amid tariff panic, many thoughts were turned to the March 2020 COVID-19 crash. 

“Black Swan in crypto today. This scenario is similar to the Covid dump with almost a 1:1 match,” well-followed market analyst Jonathan Carter asserted on X.

On the other hand, fellow prominent analyst “Tyler Durden” wrote, “Still not even 10% of the feeling of March covid crash.”

These sentiments necessitate a fresh look at what happened during the COVID-19 cryptocurrency crash.

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World’s Apart?

The COVID-19 pandemic shook the world to its core, disrupting nearly every aspect of society. These disruptions were reflected in global financial markets, including the cryptocurrency market.

When then-President Trump declared the pandemic a national emergency on March 13, 2020, the total cryptocurrency market capitalization tanked by nearly 40% from almost $224 billion to $135 billion, its worst intraday crash on record.

Bitcoin also saw its worst intraday correction on record, plummeting over 35% from around $7,000 to below $4,500. As is typically the case, Ethereum saw an even worse correction, falling 43% on the day, but it was only its second-worst correction on record.

Bitcoin continued this drop to trade as low as $3,800, marking a nearly 64% decline from its yearly high above $10,000. Ethereum, on the other hand, fell as much as 69%.

By comparison, Trump’s “Liberation Day” tariffs only sparked a 3.5% cryptocurrency market capitalization from nearly $2.8 trillion to $2.6 trillion on the day.

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Bitcoin also only recorded an initial 3% price decline from $88,500 to nearly $82,000. Furthermore, in the extended fallout, the asset has only dropped about 32% from its yearly high of $109,600 to $74,500.

Ethereum, meanwhile, dropped 6% on the initial announcement, though it has dropped as much as 62% from its yearly high.

The data suggests that the cryptocurrency market’s reaction to Trump tariffs has been nowhere near the COVID-19 crash. This could indicate greater market maturity or suggest that there is more room to fall.

The situation is not helped by the fact that Trump does not appear to be considering a pause on the controversial fresh tariffs as some had hoped. Instead, he has doubled down with threats of more tariffs on China.

At the same time, the Federal Reserve has poured cold water on hopes of a near intervention. Speaking with journalists on Friday, Fed Chair Jerome Powell suggested the central bank was adopting a wait-and-see approach.

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