Crypto markets saw a decline following the declaration of a national emergency by US President Donald Trump, accompanied by broad tariffs on all nations—part of his latest offensive in the ongoing trade conflict.
The administration has implemented a 10% tariff on all countries effective April 5, with certain nations facing even steeper rates. For instance, China is facing a 34% tariff, while the European Union has a 20% tariff and Japan a 24% tariff.
In a speech delivered on April 2 in the Rose Garden at the White House, Trump stated that the US is charging countries “about half of what they have been charging us.”
🚨 @POTUS signs an Executive Order instituting reciprocal tariffs on countries throughout the world.
It’s LIBERATION DAY in America! pic.twitter.com/p7UnfE617B
— Rapid Response 47 (@RapidResponse47) April 2, 2025
Initially, the crypto market reacted positively to the announcement of the 10% tariff, but as the broader implications became clearer, prices plummeted across the board.
Bitcoin (BTC), which had been on an upward trend and hit a session peak of $88,500, fell by 2.6% to around $82,876. Meanwhile, data indicated that Ether (ETH) dropped over 6% from $1,934 to $1,797 after the tariff news, resulting in a total crypto market capitalization decline of 5.3% to $2.7 trillion.
The Crypto Fear & Greed Index, assessing market sentiment for Bitcoin and other cryptocurrencies, noted a score of 25, categorized as extreme fear, in its latest update from April 2.
However, since then, prices have made a slight recovery. Bitcoin has climbed back by 0.8% to $83,205, while Ether has risen by 1.2% to $1,810.
The crypto Fear & Greed Index score has averaged a rating of fear for the past week, but is now classified as extreme fear. Source: Alternative.me
Stock markets also encountered challenges; a trading resource reported that the S&P 500 index lost over $2 trillion in market capitalization, equating to approximately $125 billion in losses each minute, as mentioned in an April 2 post.
Trump’s Tariffs May Provide Market Certainty
A crypto analyst from an Australian exchange noted that the initial surge was likely due to “uncertainty relief,” followed by selling pressure as more detailed information about the tariffs emerged.
“At our exchange, trading volume surged by 46% as local traders rushed to adjust their positions. Larger investors capitalized on the spike, while smaller ones hesitated,” she observed.
Source: Daan Crypto Trades
She further warned that if countries like China or those in the European Union retaliate, it could trigger another wave of panic selling.
US Treasury Secretary urged trading partners against retaliatory measures, suggesting that if they do not impose additional tariffs, the current rates could offer a “ceiling” providing market stability.
An investment specialist remarked that while there was notable volatility during the speech, long-term clarity from the announcement could be beneficial.
“Even though the rates were slightly above expectations, the announcement clarified the tariff scope and scale,” he stated.
Related:70% chance of crypto bottoming before June amid trade fears
“Markets prefer certainty, and with speculation largely diminished, institutional investors might find opportunities to capitalize on undervalued assets in the upcoming days.”
He believes that international reactions will be crucial moving forward, with countries like Mexico and key East Asian economies, including China, South Korea, and Japan, likely assessing counter-actions.
Magazine:Financial nihilism in crypto is over — It’s time to dream big again