Global markets take a dive following Trump's tariff policy, with Bitcoin feeling the brunt of it.
Digital currency markets are in turmoil once more, as traders respond to economic tension caused by fresh tariff measures implemented by former President Donald Trump. These new tariffs, which affect a broad range of imports, have resulted in sharp declines across both conventional and virtual assets.
For instance, Bitcoin, which reached an impressive $87,790 within the last 24 hours, has dropped to around $83,400, according to CoinMarketCap. This slide is visible across the crypto market, with total liquidations exceeding $518 billion within the last day. Investors are scrambling to digest the consequences of Trump's aggressive trade stance.
Many analysts were taken aback by the global tariffs and the high rates they impose against certain countries. The U.S. is introducing a 10% tariff on all goods entering the country from April 5, while specific products from specific countries face tariffs of up to 54%. These tariffs, dubbed "reciprocal tariffs," are supposed to address decades of purported unfair trade practices and promote economic fairness for the United States.
In addition to traditional markets, cryptocurrencies have been increasingly influenced by macroeconomic sentiment. Trump's latest tariff decisions have caused a shockwave that has extended beyond equities and into the cryptocurrency space. U.S. stock futures also fell sharply, with the Dow Jones Industrial Average dropping more than 1,000 points in after-hours trading, while S&P 500 futures declined by 3.5% and Nasdaq 100 futures slipped 4.2%.
Trump, speaking from the Rose Garden, stated, "The reciprocal tariffs are designed to address decades of unfair trade practices and restore economic fairness for the United States."
As the world adjusts to a rapidly evolving trade landscape, crypto holders cautiously watch the actions of regulators and central banks in the days ahead. Despite the market sell-off and the chaos, Bitcoin, often viewed as a safe haven during economic uncertainty, has not emerged unscathed. Instead of profiting from the destruction, Bitcoin seems to be following the dip alongside major indexes, reflecting the pervasive risk-off sentiment that has gripped investors.
It remains to be seen how the cryptocurrency market will react in the long run, and whether it will decouple from traditional markets if driven by internal catalysts like halvings. Some experts suggest that reciprocal tariffs could weaken traditional financial systems, making Bitcoin a more appealing decentralized alternative. However, crypto faces challenges such as rising mining costs due to imported hardware prices, which could pose a threat to network security and hash rates.
Meanwhile, traditional markets are grappling with deeper macroeconomic risks, including possible recession and policy inconsistency. Tariffs could worsen deficits by reducing US consumption and manufacturing competitiveness if they persist for an extended period. It is essential to keep a close eye on these factors as they unfold in the coming days.
In essence, while both markets face immediate challenges due to reciprocal tariffs, cryptocurrencies exhibit a higher sensitivity to risk sentiment but may thrive as a hedge against the instability of traditional financial systems. Traditional markets, however, are confronted with a more extensive range of macroeconomic dangers, including potential recession and policy inconsistency.
- The crypto market, similarly affected by Trump's tariff decisions, has seen a decline with Bitcoin dropping from $87,790 to around $83,400.
- Total liquidations within the crypto market have exceeded $518 billion in the last day, reflecting investor uncertainties.
- The fall in conventional assets, including stocks, has extended into the crypto space, with Bitcoin, traditionally seen as a safe haven, following the general-news trend.
- Tariffs could pose a challenge to crypto, where rising mining costs due to imported hardware prices could affect network security and hash rates.
