Bitcoin and most cryptocurrencies slumped on Thursday, with their total market capitalization plunging by over 5.7% to $2.6 trillion.
Pi Network (PI) was one of the worst performers as it dropped to a record low of $0.56, down by over 80% from its highest level in February.
Pepe (PEPE), the third-biggest meme coin, dropped by 17%, while Ethena (ENA) fell by 18%. The other top laggards were altcoins like Hyperliquid, Berachain, Bonk, Jito, and Official Trum, which also fell by over 15%.
The sharp decline came as U.S. recession odds surged. According to Polymarket, the probability of a U.S. recession rose to over 70%. MetLife, a leading financial services firm, increased its recession odds to 40%, while Goldman Sachs and PIMCO raised their forecasts to 35%.
These odds jumped after Donald Trump announced tariffs on all countries that export their goods to the US. Analysts caution that these tariffs pose a black swan event that could reshape the global economy.
Several countries have already pledged to retaliate. Canada imposed a 25% tariff on U.S.-made vehicles — a move that could trigger further escalation. In an interview with Bloomberg, Trade Secretary Howard Lutnick warned that tariffs on retaliating countries could rise even further.
The crash in top altcoins like Pepe, Pi Network, and Ethena mirrored declines in U.S. equities. The Dow Jones, Nasdaq 100, and S&P 500 fell by 1,200, 200, and 815 points, respectively.
They also dropped as a sense of fear spread in the financial market. The fear and greed index moved to the extreme fear zone of 11, while the crypto fear index plunged to 24.
On the positive side, bull market cycles often begin when fear is at its peak. For example, the last time the CNN Fear and Greed Index hit this level was in March 2020 which coincided with the start of the COVID-19 pandemic. Stocks and crypto began a historic rally after the Federal Reserve intervened with rate cuts and liquidity support.
Therefore, there is a possibility that Bitcoin and altcoins like Pi Network, Pepe, and Ethena will bounce back once the current wave of panic selling ends.
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