Dogecoin (DOGE) surged 7% as major cryptocurrencies experienced a relief rally on Tuesday, prompted by discussions regarding the upcoming U.S. tariffs set to take effect on April 2, which may be more measured than previously anticipated.
Reports suggest that President Donald Trump’s proposed “reciprocal tariffs” for April 2 might be more specific than originally threatened, with certain countries potentially exempt and existing metal levies possibly not compounding.
The proposed tariffs rattled markets in February, sending shockwaves through both stock and cryptocurrency arenas, with bitcoin (BTC) plummeting 17.6% to fall below $80,000 from its peak in January.
Recently, the Federal Reserve revised its inflation outlook upwards while lowering growth projections, likely influenced by Trump’s trade policies, but characterized the inflation driven by tariffs as temporary, keeping plans for two rate cuts in 2025, thus providing support for risk assets.
Combined with the anticipation of more moderate tariffs, market sentiment has improved, with memecoins leading the surge. DOGE, along with pepecoin (PEPE), mog (MOG), floki (FLOKI), and others, have all seen gains exceeding 5% in the past 24 hours, with the meme sector averaging a 5.6% increase according to CoinGecko data.
This has overshadowed a 3% rise for bitcoin, Solana’s SOL, and XRP, while the broader CoinDesk 20 (CD20) index has risen by 2.7%.
Memecoins tend to spike or act as beta trades when ether (ETH) or bitcoin experience upward movements, due to their highly speculative nature and heightened sensitivity to trends within the wider cryptocurrency market.
Retail investors often perceive relief in major cryptocurrencies as an indicator of bullish sentiment throughout the crypto landscape, leading them to seek out higher-risk, higher-reward opportunities such as memecoins, which generally have lower costs and can yield quick returns in relatively short timeframes.
AI Tokens Maintain Stability Despite ‘Bubble’ Concerns
Meanwhile, major Artificial Intelligence (AI) tokens are holding steady after Alibaba’s Joe Tsai expressed concerns about a potential bubble developing within the sector; the category has reported a 4.5% increase over the past 24 hours, based on CoinGecko data.
“I am beginning to see early signs of a bubble,” Tsai noted during a conference hosted by HSBC in Hong Kong. “I become worried when I see people constructing data centers on speculation. Many are emerging, with funds seeking to raise significant capital.”
Tsai believes that investments in AI seem to be happening ahead of actual demand.
NEAR protocol, the top AI token by market capitalization, is stable today but has risen 14% over the past week as the market positively reacts to news that Coinbase is collaborating with leading AI enterprises to develop AI agent technology.
Story’s IP token continues its positive trend, climbing 8% on the day, as the project secures notable intellectual property from Hollywood and K-pop stars to monetize within its ecosystem. Story is promoting its platform as a means for rights holders to thrive in the AI era by simplifying the licensing of their content for AI training purposes.
