Dogecoin Rallies 7% as Crypto Markets Rebound on Optimism Over U.S. Tariffs
Dogecoin (DOGE) surged 7% on Tuesday, leading a broader relief rally in the crypto market as reports suggested that the upcoming U.S. tariffs, set to take effect on April 2, may be less severe than initially feared.
According to sources, President Donald Trump’s proposed “reciprocal tariffs” could be more targeted, with certain countries receiving exemptions and existing metal tariffs potentially not increasing. The news provided some relief to financial markets, which had been rattled in February when the initial tariff announcements caused both stocks and cryptocurrencies to tumble—Bitcoin (BTC) dropped 17.6% from its January peak, briefly falling below $80,000.
Market Optimism Returns Amid Fed Support
Last week, the Federal Reserve revised its economic outlook, raising inflation forecasts and lowering growth projections, likely in response to Trump’s trade policies. However, the Fed described the impact of tariffs as temporary and reaffirmed its plan for two interest rate cuts in 2025, helping to support risk assets, including cryptocurrencies.
This renewed optimism has bolstered speculative assets, with memecoins leading the charge. DOGE, Pepecoin (PEPE), Mog (MOG), and Floki (FLOKI) have all gained over 5% in the last 24 hours, while the broader memecoin sector is up 5.6% on average, according to CoinGecko data.
In comparison, Bitcoin (BTC), Solana (SOL), and XRP saw a more modest 3% gain, while the CoinDesk 20 (CD20) index rose 2.7%.
Memecoins often experience higher volatility and exaggerated price swings when major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) rise, as retail investors seek higher-risk, high-reward opportunities in lower-priced speculative assets.
AI Tokens Hold Steady Despite ‘Bubble’ Warnings
While memecoins surged, AI-related tokens remained stable despite concerns about speculative excess in the sector. Alibaba Chairman Joe Tsai cautioned that AI investments may be outpacing demand, suggesting that a bubble may be forming.
“I start to see the beginnings of some kind of bubble,” Tsai stated during an HSBC conference in Hong Kong, pointing to the rapid expansion of data center construction and capital inflows into AI-focused ventures.
Despite these warnings, the AI token sector saw a 4.5% gain in the last 24 hours, per CoinGecko data. NEAR Protocol, the largest AI-related crypto by market cap, remained flat on the day but has surged 14% over the past week, buoyed by news that Coinbase and leading AI firms are collaborating on AI agent technology.
Meanwhile, Story Protocol’s IP token continued its strong performance, climbing 8% in the past day. The project has been actively securing intellectual property deals in Hollywood and K-pop, aiming to help rights holders monetize their content for AI training.
