Eric Trump's Ill-Timed Ethereum (ETH) Endorsement Precedes a 40% Plunge in Its Price

The volatile world of cryptocurrency has once again delivered a stark reminder of its inherent unpredictability, particularly when intertwined with the pronouncements of influential figures.

Eric Trump, son of former U.S. President Donald Trump, took to X (formerly Twitter) to advise his 5.7 million followers to "add ETH now" to their portfolios, as he deemed it a great time to buy the leading altcoin.

At the time, the second-largest cryptocurrency appeared to be forming a base around $2,400 after a steep decline from the $2,700 zone. However, the ensuing weeks saw the price of Ether (ETH) nearly halve, erasing a large portion of its gains and contrasting sharply with the younger Trump’s bullish outlook.

Having reached a high of $3,170 on March 31, 2023, the price of Ether has since slid to $1,820, according to TradingView data. A glance at the daily price chart for ETH/USD reveals a series of red candles, indicating sustained selling pressure throughout the period.

Moreover, Ether’s market share, measured by its dominance index, has also taken a significant hit. At the time of Eric Trump’s X post, Ether commanded 10.28% of the total cryptocurrency market capitalization. However, this figure has since dwindled to 8.39%, reaching the lowest level since 2020.

This decline can be attributed in part to the cryptocurrency market capitalization rising to $1.56 trillion from $1.46 trillion over the past two months, while the value of the second-largest cryptocurrency has decreased.

A $1.5 billion security breach on cryptocurrency exchange Bybit on February 21 saw hackers steal a large sum of Ether.

The incident at the cryptocurrency exchange, which reportedly took place on February 21, saw hackers make off with nearly $1.5 billion in Ether.

This heist, recognized as the biggest in cryptocurrency history, had implications for the market as it dampened investor morale and sparked a round of sell-offs.

The breach at Bybit brought to light the vulnerabilities that still exist in the digital asset realm despite advancements in security protocols. It also highlighted the potential for systemic risk, considering that the loss of such a large sum could have knock-on effects.

Furthermore, President Trump’s escalating tariff war against Canada, Mexico, and China has intensified selling pressure on Ethereum and the broader market. His decision to introduce 25% tariffs on auto imports, set to take effect on April 3, has dampened risk appetite among investors.

These tariffs are part of President Trump’s broader trade agenda, which has been focused on reducing the U.S. trade deficit and protecting American jobs. However, the tariffs have drawn criticism from economists, who argue that they will ultimately harm consumers and businesses.

The trade tensions have created a climate of uncertainty, with investors concerned about the potential impact on global trade and economic growth. This has led to a preference for less risky assets, such as U.S. Treasury bonds.

Finally, macroeconomic uncertainty has also played a role in Ether’s decline. Concerns about inflation, rising interest rates, and potential economic slowdowns have weighed on investor sentiment, leading to a flight to safety. In this context, cryptocurrencies, often seen as a risky asset class, have suffered disproportionately.

A triple threat of macroeconomic uncertainty, a major cryptocurrency exchange security breach, and the U.S. president’s intervention has seen the price of Ether plummet.

After a steep decline of nearly 40%, the price of the second-largest cryptocurrency has slid to $1,820, erasing a large portion of its gains.

Earlier this year, the price of Ether hit a high of $3,170, but with the cryptocurrency now down 43%, it seems to be bottoming out around the $1,700 zone.

The second-largest cryptocurrency is also lagging in terms of market share, as its dominance index has slid to 8.39%, reaching the lowest level since 2020.

At the time of Eric Trump’s X post, Ether had a market share of 10.28%, but this has decreased due to the cryptocurrency market capitalization rising to $1.56 trillion from $1.46 trillion over the past two months.

The decrease in Ether’s market share comes as investors pulled capital from the second-largest cryptocurrency and channeled it toward other assets.

A cryptocurrency portfolio management firm co-founder, Michaël van de Poppe, expressed skepticism regarding an immediate rebound in the price of Ether.

In a recent analysis, van de Poppe noted that the price of gold is likely to peak before the price of Ether bottoms out.

“I don’t think so. We’ll have to wait for the U.S. dollar to peak, and then we’ll see a rush into crypto again—when gold peaks, they’ll start dumping equities