The crypto market has recently witnessed significant volatility, particularly with Bitcoin (BTC) experiencing a sharp dump. Meanwhile, global economic and political factors, along with World Liberty Financial (WLF), a fund linked to U.S. President Donald Trump, accumulating Ethereum, are drawing the attention of investors.
In this article, we’ll break down each aspect to better understand the current situation.
Why Did Bitcoin Dump Heavily?
Recently, BTC price went down to approximately $85K, a 21,1% decrease compared to its all-time-high $109,114 in January.
Source: CoinGecko
According to Arkham Intelligence, on-chain data revealed a large movement of Bitcoin, potentially tied to sell-offs or distribution from major wallets. This isn’t uncommon in the crypto market, where the actions of several crypto asset managers, including Grayscale, Fidelity and BlackRock often trigger significant price swings.
FIDELITY SOLD
ARK SOLD
GRAYSCALE SOLDBUT BLACKROCK… ALSO SOLD $150M $BTC pic.twitter.com/Zfn4W2iIhk
— Arkham (@arkham) February 26, 2025
Specifically, when a large amount of BTC is moved from cold storage to exchanges, the market typically interprets it as a signal of impending sales. Increased selling pressure can cause BTC’s price to drop rapidly, especially amid a market already sensitive to macroeconomic news. This decline occurred in late October 2024, coinciding with investor concerns over potential economic policy shifts from the U.S., which we’ll explore next.
The Context of Trump Taxing the EU
A key factor possibly contributing to BTC’s dump is news surrounding Donald Trump’s tariff policies. According to CNBC, President Trump has repeatedly expressed intentions to impose 25% tariffs on goods from the European Union (EU) to protect the domestic economy. If implemented, this policy could escalate global trade tensions.
When trade wars become a concern, investors often reduce their risk appetite. Although Bitcoin is considered “digital gold,” it frequently experiences short-term negative impacts during periods of instability in traditional financial markets. Uncertainty about the global economic fallout from these tariffs may have prompted some investors to sell BTC and shift to safer assets like government bonds or physical gold, adding downward pressure on its price.
World Liberty Financial Accumulating ETH
While BTC took a dive, a contrasting trend emerged with Ethereum. World Liberty Financial (WLFI), a DeFi project backed by the Trump family, has been accumulating a substantial amount of ETH recently. By early 2025, Arkham data shows WLFI holding roughly $4.64 million in ETH, and up to 2K ETH in the last 7 days.
Source: Arkham
ETH has been in a prolonged “stagnant” phase, unable to break its ATH from 2021 (around $4,800). However, WLF’s ETH accumulation is sparking speculation that it could signal a new rally. Some analysts suggest that Trump’s association with WLF, combined with his campaign promises of crypto-friendly policies as mentioned by The Guardian, might provide a boost for ETH. If WLF continues buying and the market responds positively, ETH could break through resistance levels and aim for $4,000–$4,500 in the near future.
