On April 2, 2025, President Donald Trump announced “Liberation Day,” revealing an all-encompassing tariff strategy to cut the U.S. trade deficit and encourage domestic production. The new policies include a blanket 10% tariff on imports from most nations, with extra country-specific tariffs of up to 54% on Chinese products. The tariffs will be phased in, starting April 5 and increasing on April 9.
The news has placed immense volatility on world markets, with the cryptocurrency market seeing considerable fluctuations. Bitcoin (BTC), for example, dropped its price to below $75,000 on April 7, its lowest since the election post-rally. This was, however, followed by Trump’s announcement of a 90-day moratorium on tit-for-tat tariffs, after which Bitcoin rallied, rising well above $82,000.
The overall crypto market tracked Bitcoin’s volatility. Ethereum (ETH) plummeted to levels around $1,500, reducing its worth by half from February. Solana (SOL) and XRP are among the cryptocurrencies that faced extreme downturns due to uncertainty. Analysts place the blame on investor anxieties regarding the possible economic effect of the tariffs. In the past, such protectionist policies have resulted in higher inflation and upsetting global supply chains, which send investors away from riskier assets such a cryptocurrencies. The present policy uncertainty is cited as being 80% above pre-2008 crisis levels, adding to market volatility.
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Despite the short-term market responses, the long-term consequences for the crypto space are unclear. The Trump administration has indicated a pro-crypto attitude, as seen in the creation of a Strategic Bitcoin Reserve and a Digital Asset Stockpile. Both moves are designed to make the U.S. a digital financial technology leader, possibly providing a friendly platform for the development of cryptocurrencies.
Overall, while Trump’s “Liberation Day” tariffs have injected short-term uncertainty into the crypto markets, the administration’s supportive policies toward digital assets could potentially counteract long-term negative implications. Investors are encouraged to stay on top of current trade dynamics and regulatory updates to navigate effectively this changing terrain.
Also read: Crypto’s Comeback: How New Tokens are Rising Amid Tariff Turmoil
