Despite Bitcoin’s 2.2% gains on April 1, BTC (BTC) hasn’t traded above $89,000 since March 7. Even though the recent price weakness is often linked to the escalating US-led global trade war, several factors had already been weighing on investor sentiment long before President Donald Trump announced the tariffs.

Some market participants claimed that Strategy’s $5.25 billion worth of Bitcoin purchases since February is the primary reason BTC has held above the $80,000 support. But, regardless of who has been buying, the reality is that Bitcoin was already showing limited upside before President Trump announced the 10% Chinese import tariffs on Jan. 21.

Gold/USD (left) vs. Bitcoin/USD (right). Source: TradingView / Cointelegraph

The S&P 500 index hit an all-time high on Feb. 19, exactly 30 days after the trade war began, while Bitcoin had repeatedly failed to hold above $100,000 for the previous three months. Although the trade war certainly affected investor risk appetite, strong evidence suggests Bitcoin’s price weakness started well before President Trump took office on Jan. 20.

Spot Bitcoin ETFs inflows, strategic Bitcoin reserve expectations and inflationary trends

Another data point that weakens the relation with tariffs is the spot Bitcoin exchange-traded funds (ETFs), which saw $2.75 billion in net inflows during the three weeks following Jan. 21. By Feb. 18, the US had announced plans to impose tariffs on imports from Canada and Mexico, while the European Union and China had already retaliated. In essence, institutional demand for Bitcoin persisted even as the trade war escalated.

Part of Bitcoin traders’ disappointment after Jan. 21 stems from excessive expectations surrounding President Trump’s campaign promise of a “strategic national Bitcoin stockpile,” mentioned at the Bitcoin Conference in July 2024. As investors grew impatient, their frustration peaked when the actual executive order was issued on March 6.

A key factor behind Bitcoin’s struggle to break above $89,000 is an inflationary trend, reflecting a relatively successful strategy by global central banks. In February, the US Personal Consumption Expenditures (PCE) Price Index rose 2.5% year-over-year, while the eurozone Consumer Price Index (CPI) increased by 2.2% in March.

Investors turn more risk-averse following weak job market data

In the second half of 2022, Bitcoin’s gains were driven by inflation soaring above 5%, suggesting that businesses and families turned to cryptocurrency as a hedge against monetary debasement. However, if inflation remains relatively under control in 2025, lower interest rates would favor real estate and stock markets more directly than Bitcoin, as reduced financing costs boost those sectors.

US CPI inflation (left) vs. US 2-year Treasury yield (right). Source: TradingView

Related: Coinbase sees worst quarter since FTX collapse amid industry bloodbath

The weakening job market also dampens traders’ demand for risk-on assets, including Bitcoin. In February, the US Labor Department reported job openings near a four-year low. Similarly, yields on the US 2-year Treasury fell to a six-month low, with investors accepting a modest 3.88% return for the safety of government-backed instruments. This data suggests a rising choice for risk aversion, which is unfavorable for Bitcoin.

Ultimately, Bitcoin’s price weakness stems from investors’ unrealistic expectations of BTC acquisitions by the US Treasury, declining inflation supporting potential interest rate cuts, and a more risk-averse macroeconomic environment as investors turn to short-term government bonds. While the trade war has had negative effects, Bitcoin was already showing signs of weakness before it began.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

American Bitcoin Corp., a Trump family-backed crypto mining operation, has plans to raise additional capital, including through an initial public offering (IPO), according to an April 1 report by Bloomberg. 

On March 31, Hut 8 — a publicly traded Bitcoin (BTC) miner — acquired a majority stake in American Bitcoin (formerly American Data Centers), whose founders include Donald Trump Jr. and Eric Trump. 

After the deal announcement, Hut 8 transferred its Bitcoin mining equipment into the newly created entity, which is not yet publicly traded. 

While American Bitcoin will focus on crypto mining, Hut 8 plans to target data center infrastructure for use cases such as high-performance computing. The deal “evolves Hut 8 toward more predictable, financeable, lower-cost-of-capital segments,” Asher Genoot, CEO of Hut 8, said in a statement.

“So you can see this in the long term as two sister publicly traded companies,” Genoot told Bloomberg. “One that is energy, infrastructure data centers and the other one that’s Bitcoin, AISCs and reserves and together they form a vertically integrated company that has some of the best economics out there.”

According to Bloomberg, American Bitcoin is working with Bitmain, a Chinese Bitcoin mining hardware supplier. Bitmain has faced scrutiny after the US blacklisting of its artificial intelligence affiliate Sopghgo, Bloomberg reported. 

Bitcoin mining revenues per quarter. Source: Coin Metrics

Related: Analysts eye Bitcoin miners’ AI, chip sales ahead of Q4 earnings

Pivoting to new business lines

Bitcoin miners are increasingly pivoting toward alternative business lines, such as servicing artificial intelligence models, after the Bitcoin network’s April 2024 “halving” cut into mining revenues.

Halvings occur every four years and cut in half the number of BTC mined per block.

Miners are “diversifying into AI data-center hosting as a way to expand revenue and repurpose existing infrastructure for high-performance computing,” Coin Metrics said in a March report.

Declining cryptocurrency prices have put even more pressure on Bitcoin miners in 2025, according to a report by JPMorgan.

Magazine: Elon Musk’s plan to run government on blockchain faces uphill battle

Crypto stablecoin issuer Circle Internet Group has filed with the US Securities and Exchange Commission to go public on the New York Stock Exchange.

The USDC (USDC) issuer is planning to list its Class A common stock under the symbol “CRCL,” according to its April 1 Form S-1 registration statement with the SEC.

Circle’s prospectus does not detail the number of shares to be offered or what its initial public offering target price will be.

The filing also showed that Circle brought in $1.67 billion in revenue for 2024, a 16% year-on-year increase.

Its net income last year was $155.6 million — a 41.8% fall from 2023, while 2022 saw a net loss of $761.7 million.

Circle’s financials over the last three years ended Dec. 31. Source: SEC

Over 99% of Circle’s revenue last year came from its stablecoin reserves, the filing showed. The company generates income by holding yield-bearing treasury bills.

Circle has previously attempted to go public via a Special Purpose Acquisition Company (SPAC) merger in 2021— which it abandoned in December 2022 — and again in January 2024 via a confidential filing with the SEC.

Related: Circle, Intercontinental Exchange to explore stablecoin integration

Crypto exchange Kraken and blockchain security firm BitGo are among the other industry players also reportedly seeking a public listing either this year or early 2026.

Circle became the first stablecoin issuer to receive regulatory approval in Japan on March 25 — launching USDC on the SBI VC Trade crypto exchange the following day.

USDC is the second-largest stablecoin by market cap at $60.1 billion, trailing only Tether (USDT) at $143.9 billion, CoinGecko data shows.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom