When Donald Trump announced his “reciprocal” tariff plans, Bitcoin didn’t just stumble—it plummeted. The leading cryptocurrency dropped a staggering 7.2% in just four hours, crashing from $88,526 to $82,150. Ouch. That’s the kind of financial whiplash that leaves investors reaching for the aspirin.
The damage wasn’t isolated to Bitcoin either. The global crypto market cap shrunk by 11% in 24 hours, wiping out roughly $330 billion in value. Talk about raining on the crypto parade. January’s record high of $107,071.86 now seems like a distant memory, replaced by grim predictions of Bitcoin potentially falling to $71,000 if the negative sentiment persists.
Panic selling took hold as $2 billion worth of crypto assets were liquidated within 12 hours of Trump’s announcement. This behavior is typical of bear market characteristics where fear replaces optimism and triggers widespread pessimism. Investors fled to safety faster than teenagers scatter when parents come home early. Stablecoins now represent over 92% of trading volume—a crystal-clear sign that traders are running for cover.
Meanwhile, traditional markets showed more resilience. The S&P 500 actually closed 0.7% higher after the tariff news, while Bitcoin tanked 8.5% in a single day. Gold hit an all-time high. Classic gold, always showing up to the recession party right on time.
The tariffs themselves? Massive. Affecting 185 countries with a complex “reciprocal” rate system that has economists scratching their heads. The announcement coincided with a $2 trillion loss in S&P 500 futures market capitalization. Not exactly small potatoes.
Bitcoin’s sensitivity to these macroeconomic shifts isn’t surprising. It’s always been more reactive than your ex on social media. Analysts claim Bitcoin needs strong support at $90,000 to manage further risks, but recovery ultimately depends on broader economic stability. The Philadelphia Fed’s Business Outlook Survey falling below 15 points to economic uncertainty at its highest since major downturns in 2000, 2008, and 2022.
For now, Bitcoin’s dominance in the crypto market has increased to 61%, suggesting investors who aren’t fleeing crypto entirely are at least consolidating into what they perceive as the safest digital asset. Despite the current turmoil, some industry figures like Arthur Hayes maintain bullish predictions that Bitcoin could reach $250,000 by year-end. Small comfort in a market that just took a Trump-sized beating.
