Bitcoin, Ethereum, and the majority of altcoins are experiencing declines following an unusual rise in US tariffs on China.
The cryptocurrency markets are still feeling the impact of the most recent US tariff increase. On Tuesday, April 8, it was officially announced that tariffs on all imports from China will escalate to 104%, effective April 9 at 12:01 AM Eastern Time.
Immediately following this news, Bitcoin (BTC) fell to a low of $76,508 for the day, while Ethereum (ETH) dropped to $1,454. This decline can likely be attributed to concerns about the adverse effects these unprecedented tariffs could have on the global economy.
The White House’s announcement came after China did not heed Donald Trump’s warning. The US president had threatened an additional 50% tariff increase if China did not retract its 34% retaliatory tariffs on US products by April 8.
The implications of tariffs for Bitcoin and cryptocurrency
This scenario could be especially troubling for risk assets, which depend heavily on growth to sustain their inflated valuations. However, some analysts offer a different perspective, particularly regarding Bitcoin. Arthur Hayes, co-founder of BitMEX, argues that the intensifying trade conflict with China might actually serve as a catalyst for Bitcoin.
Hayes anticipates that the trade war could lead to inflationary pressures on the yuan, prompting Chinese investors to seek out Bitcoin as a safe haven. A similar situation has previously occurred and subsequently boosted Bitcoin’s price.
At this point, the future direction of the White House’s tariff strategy remains uncertain. According to recent data, the likelihood of Trump reducing a majority of tariffs by July has dropped to 50%, down from a peak of 64% on April 7.