As former President Trump announced new tariffs on international trade, Bitcoin’s price tumbled to $95,000, marking a considerable drop from its recent peak of $109,000. The announcement outlined a 25% tariff on goods from Canada and Mexico, along with a 10% tariff on Chinese imports, sending shockwaves through both traditional and cryptocurrency markets.
Crypto-related stocks suffered immediate impacts, declining by 5% or more in premarket trading. Major crypto companies like Coinbase and MicroStrategy experienced significant selloffs during Monday morning trading. Regulation by enforcement could end under SEC Chair Paul Atkins’ deregulatory stance, offering a silver lining for the industry. While Bitcoin has gained 3% year-to-date, it’s considerably underperforming compared to gold, which has surged 9% to reach a record high of $2,882 per ounce. Other cryptocurrencies faced similar pressures, with Ethereum trading at $24,468, down 20% from its peak, while BNB, XRP, and Solana also experienced notable declines.
Trump’s relationship with cryptocurrency has evolved over time. Despite previously calling Bitcoin a threat to the U.S. dollar, his recent statements suggest a more open stance, including discussions about establishing a federal Bitcoin reserve. His pro-business approach and crypto-friendly cabinet appointments had initially sparked optimism in the digital asset community. The bearish sentiment has led to reduced trading volumes across major exchanges as investors remain cautious.
The tariff announcement’s impact extends beyond immediate price movements. The prospect of tariff-driven inflation could prevent future interest rate cuts, affecting both traditional and crypto markets. During previous U.S.-China trade conflicts, digital assets gained popularity as a potential hedge against market uncertainty.
Market analysts note that Bitcoin’s current performance demonstrates its struggle to compete with gold’s traditional safe-haven status. While Bitcoin trades 10% below its peak, gold continues to attract investors seeking stability during periods of economic uncertainty. The cryptocurrency market’s immediate reaction to trade policy changes suggests it hasn’t yet achieved the stability typically associated with safe-haven assets.
The market outlook remains tied to international responses to these new tariffs. While some investors view digital assets as a potential hedge against inflation and market unpredictability, current data suggests Bitcoin might test lower levels, potentially reaching $89,000 before finding new support.
