Dogecoin Surges 7% as Bitcoin, XRP See Brief Rally on Hopes of Trade War Easing

Dogecoin (DOGE) experienced a 7% surge on Tuesday, part of a broader market rally fueled by optimism surrounding upcoming U.S. tariffs. Reports suggest that President Trump's planned "reciprocal tariffs," scheduled for April 2nd, may be more targeted than initially feared, potentially exempting some countries and avoiding a stacking of existing metal levies.

These tariffs had previously unsettled markets in February, causing significant drops in both stocks and cryptocurrencies, including a 17.6% decline in Bitcoin (BTC) from its January peak, falling below $80,000.

Last week, the Federal Reserve revised its forecasts, raising inflation projections while lowering growth estimates—likely influenced by Trump's trade policies. However, the Fed characterized tariff-driven inflation as temporary, maintaining its plan for two rate cuts in 2025, a move supportive of risk assets.

This, combined with the prospect of less severe tariffs, has boosted market sentiment, with memecoins leading the gains. DOGE, pepecoin (PEPE), mog (MOG), floki (FLOKI), and others, saw increases exceeding 5% in the past 24 hours, with the memecoin sector averaging a 5.6% rise according to CoinGecko data. This outperformed Bitcoin, Solana's SOL, and XRP (which saw a 3% increase), and the broader CoinDesk 20 (CD20) index (up 2.7%).

Memecoins often exhibit amplified sensitivity to broader crypto market trends, acting as leveraged bets when Bitcoin or Ether (ETH) rise due to their speculative nature. Retail traders frequently interpret positive movements in major cryptocurrencies as a bullish signal for the entire ecosystem, prompting investment in higher-risk, higher-reward opportunities like memecoins, which are typically less expensive and can offer rapid returns.

AI Tokens Maintain Stability Amidst "Bubble" Concerns

Meanwhile, Artificial Intelligence (AI) tokens have remained relatively stable despite concerns voiced by Alibaba's Joe Tsai, who suggested a bubble may be forming. Despite this, the category is up 4.5% in the last 24 hours, per CoinGecko data. Tsai expressed concern about overinvestment in AI infrastructure, particularly the building of data centers ahead of current market demand.

NEAR protocol, the largest AI token by market capitalization, traded flat today but is up 14% over the past week. This follows positive market reaction to news of collaboration between Coinbase and major AI players to develop AI agent technology.

Story's IP token also performed well, increasing by 8% in a single day. This is attributed to the project's ongoing efforts to secure and monetize intellectual property from prominent Hollywood and K-pop entities. Story positions itself as a solution for rights holders to navigate the AI revolution by facilitating content licensing for AI training.