The initiation of substantial tariffs during the previous administration has marked a new era of unpredictability and opportunity within the cryptocurrency sector, which fluctuates in response to shifts in the global economy.
These tariffs are intended to raise the costs associated with imported goods, frequently resulting in increased inflation, alterations to supply chains, and variations in currency values. A stronger U.S. dollar, fueled by trade imbalances caused by these tariffs, may initially exert downward pressure on cryptocurrency prices as investors seek the stability of traditional safe havens.
Nevertheless, enduring economic instability could enhance the attractiveness of Bitcoin as a store of value, particularly if central banks resort to accommodating monetary policies.
Here’s how those trading in cryptocurrencies and market analysts are preparing for the upcoming months — largely anticipating subdued price movements in the short term but optimistic about the medium to long range prospects.
Rick Maeda, Research Analyst
The hefty tariffs, escalating to 34% on imports from China and 25% on vehicles from an initial 10%, have rattled global markets, including the cryptocurrency sector.
Bitcoin experienced a downturn, falling to around $82,000 while Ethereum saw an even sharper decline, dropping beneath $1,800.
In terms of options, traders showed a tendency to buy puts across various timeframes as a hedge against further downward movements, yet the implied volatility patterns remained relatively stable.
The cryptocurrency market continues to be influenced by the trade policies from the former administration, with earlier shocks stemming from proposed tariffs on Mexico and Canada, each set at 25%. Without a robust intrinsic narrative, the asset class remains closely linked to broader macroeconomic factors, with its connections keeping it aligned with trade war developments. A drawn-out trade conflict could further impact cryptocurrencies, as they continue to be characterized as risk assets rather than the digital gold they were once perceived to be.
Enmanuel Cardozo, Market Analyst
“The recent tariffs announced are significantly disrupting the cryptocurrency landscape. For instance, Bitcoin surged to $88,500 and was nearing the $90,000 mark but quickly fell to around $82,000 in just four hours.
In the short term, these tariffs are contributing to notable volatility, as economic uncertainty sways retail investors towards safer options such as gold or traditional assets, while institutional players persist in accumulating Bitcoin.
This is compounded by a general risk-off sentiment, with a survey indicating that 51% of institutional traders identify inflation and tariffs as the primary influencers this year. However, beyond the immediate chaos, there could be a favorable long-term outlook for cryptocurrencies.
The tariffs could diminish the dollar’s stronghold by raising the cost of imports, potentially positioning Bitcoin as a viable inflation hedge.
With global trade becoming increasingly complicated, cryptocurrencies could regain relevance for cross-border transactions, particularly as stablecoins emerge as effective alternatives to avoid tariff hurdles, as evidenced by the uptick in government-backed stablecoin adoption.
The strategy behind these tariffs, possibly weakening the dollar, adds another dimension. Should this lead to easier financial conditions, Bitcoin might benefit in the long run. I’ll be monitoring how these tariffs interplay with central bank policies and overall market sentiment to see how cryptocurrencies adjust to this landscape.”
Alvin Kan, COO
“The proposed tariffs could lead to stagflation—rising prices without corresponding growth—which may erode confidence in fiat currencies, especially the U.S. dollar. As capital seeks refuge from inflation and trade conflict uncertainties, Bitcoin emerges as a neutral, decentralized asset. Should the dollar’s strength decline and volatility rise, demand for BTC could increase significantly.
In a divided, protectionist environment, Bitcoin is shifting from a speculative asset to a means of preservation, and savvy traders are already positioning themselves accordingly.”
Augustine Fan, Head of Insights
“Retaliation from trade partners looms, while cross-asset responses triggered a notable risk-off phase, causing BTC to mirror recent lows. In comparison with U.S. equities, which have dropped below recent thresholds, cryptocurrency has shown some resilience, with Bitcoin maintaining above the $80,000 mark as a weaker dollar and a stronger gold market provide an opportunity for investors to view Bitcoin as a quality asset.
A statement from a key official attributed the sell-off to a broader systemic issue, further dampening market confidence.
The prevailing trend appears to be risk aversion, with few expecting a rapid shift in strategy after such a bold approach, and U.S. assets anticipated to underperform given the evident economic slowdown.
We are inclined to buy BTC on substantial price dips toward the $76,000 to $77,000 range.”
Ryan Lee, Chief Analyst
“The unexpectedly severe tariffs may have instigated a panic-driven sell-off throughout the market, with Ethereum and Solana seeing drops of around 6%, prompting a migration towards stablecoins amidst rising fears.
Beyond the initial shockwave, these tariffs could pose a threat to the U.S. economy, with potential repercussions for crypto markets. Increased import expenses—especially from major partners like China—could accelerate inflation, with some forecasting a 2-3% consumer price index increase by the second quarter of 2025 if trade tensions escalate further.
Simultaneously, the GDP forecast by the Atlanta Fed points to a 2.8% contraction for the first quarter of 2025, which may worsen as consumer spending and investments decline under tariff pressure.
A weakening dollar, driven by economic challenges and the possibility of the Fed easing policies, may position Bitcoin as a hedge, with data indicating early signs of accumulation. However, altcoins may require stronger fundamentals to thrive in the long run.”
Read more: Why Tariffs Could Present Opportunities for Bitcoin