Bitcoin Declines but Holds Up Better Than Expected
Beyond the initial shock, these tariffs pose a serious threat to the U.S. economy, potentially impacting crypto markets as well.
Despite global uncertainty and market pressure, Bitcoin and cryptocurrencies demonstrate remarkable resilience, solidifying their position as an alternative amid economic volatility.
Donald Trump’s announcement of a universal 10% tariff has shaken global markets, fueling fears of inflation, escalating trade disputes, and slowing economic growth. As a result, risk assets have taken a significant hit.
Defying Expectations
Contrary to expectations, Bitcoin and cryptocurrencies are weathering the tariff impact better than anticipated. Solana has dropped sharply (-8%), while Ethereum is down (-4%). Meanwhile, BTC is holding at $82,000, slipping just -2.5% in the past 24 hours, according to Binance.
This marks one of the most aggressive tariff measures in recent history, featuring high rates and an extremely short window before implementation. The likelihood of the Federal Reserve cutting interest rates under these conditions seems slim. What Trump calls “Liberation Day” could, in reality, signal the start of a new global trade war with widespread retaliatory measures.
While stock markets have retreated, the reaction in implied volatility has been relatively contained. The VIX index has risen to 23.5%, reflecting some uncertainty, yet it remains well below the August 2024 peak of 36% when recession fears surged amid a weakening labor market.
How the Crypto Market Is Reacting
Trump’s unexpectedly severe tariffs, ranging from 10% to 49% on imports, could have triggered a broad panic-driven sell-off, with ETH and SOL dropping around 6% as investors shifted into stablecoins amid growing uncertainty.
Beyond the initial shock, these tariffs pose a serious threat to the U.S. economy, potentially impacting crypto markets as well. Higher import costs—especially from key trade partners like China—could accelerate inflation, with some models projecting a 2-3% rise in the CPI for Q2 2025 if the trade war escalates.
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