Stagflation Concerns Keep Crypto Down Despite Court Victory on Trump Tariffs

The cryptocurrency market faced conflicting signals on Friday as policy wins collided with macroeconomic headwinds. While the U.S. Supreme Court dealt a significant blow to President Trump’s tariff regime in a 6-3 decision, the initial rally in digital assets proved fleeting, exposing the market’s sensitivity to broader economic concerns. Bitcoin, which briefly climbed above $68,000 following the court’s ruling, retreated to the $67,000 level within minutes—a telling reminder that policy-friendly news alone cannot sustain crypto momentum when stagflationary pressures dominate the macro environment.

The Supreme Court’s decision struck down the tariff regime on constitutional grounds. “No President has invoked the statute to impose any tariffs, let alone tariffs of this magnitude and scope,” the court stated. “That ‘lack of historical precedent,’ coupled with the ‘breadth of authority’ that the President now claims, suggests that the tariffs extend beyond the President’s ‘legitimate reach.’” For risk assets and crypto specifically, the ruling represented a potential tailwind, as tariff uncertainties have weighed on market sentiment. Yet the market’s muted response underscored a deeper concern: inflation and growth dynamics remained the real driver of investor behavior.

Economic Data Reveals the Stagflation Trap

The real headline that day came from economic data, which painted a picture of simultaneous weakness in growth and strength in price pressures—the classic stagflation scenario. The U.S. economy expanded just 1.4% in the final quarter of 2025, falling short of expectations and marking the slowest growth since the Covid pandemic year of 2020. Simultaneously, core personal consumer expenditure prices jumped 3% year-over-year, exceeding the 2.9% forecast and up from 2.8% in the previous period.

Art Hogan, chief market strategist at B. Riley Wealth, captured the market’s confusion: “Today’s economic data delivered conflicting signals of hotter-than-expected inflation coupled with slower-than-anticipated growth. This messy backdrop reinforces the current Fed’s cautious approach to monetary policy.” The data essentially trapped investors between two concerns: the fear of lingering inflation potentially limiting rate cuts, and the reality of slowing growth that might eventually force policy easing. Crypto, typically sensitive to both inflation hedging narratives and rate expectations, found itself whipsawed by these competing forces.

Why the Market’s Crypto Rally Fizzled

Unlike equities, which showed more resilience with the Nasdaq up 0.6% to session highs and broader strength elsewhere, digital assets experienced a sharper rejection of the good news. Bitcoin’s temporary pop above $68,000 reversed quickly—a pattern that had become increasingly common in crypto markets. The divergence underscored a crucial insight: while traditional markets could absorb good policy news even amid economic slowdown, crypto investors remained preoccupied with the stagflation trap. The current market conditions prioritized macro data over regulatory improvements.

Altcoins suffered even larger initial enthusiasm before equally sharp retreats. Ethereum, Solana, and Dogecoin each briefly spiked approximately 5% before facing profit-taking and broader sentiment shifts. Crypto-linked mining stocks, which had rallied alongside the initial market enthusiasm, similarly gave back gains as equities sold off later in the session.

Where Bitcoin Heads Next: The Oil Factor

Analysts point to a critical variable for crypto’s next move: the stabilization of oil prices and shipping through the Strait of Hormuz. Should geopolitical tensions ease and energy markets stabilize, Bitcoin could mount another attempt at the $74,000 to $76,000 range—levels that represent meaningful resistance in the current uptrend. Conversely, if geopolitical complications worsen or oil volatility persists, prices risk retreating toward the mid-$60,000s, where support remains meaningful.

Current Bitcoin data shows the asset trading at $70.72K with a 24-hour gain of 3.56%, reflecting modest recovery from Friday’s lows. Yet the real message for crypto investors remains clear: in a stagflationary environment, even favorable court decisions provide only temporary relief. The longer-term trend depends on whether the macro backdrop—inflation, growth, and geopolitical risk—can stabilize into a configuration that supports renewed investor confidence in digital assets.