- Bitcoin surged to $87,800 before quickly dropping to $85,500 as markets reacted to Trump’s new tariff measures.
- Bitcoin remains volatile amid economic uncertainty, with analysts suggesting tariffs could influence inflation and Fed policy decisions.
The cryptocurrency market experienced a dramatic swing on Wednesday as U.S. President Donald Trump moved forward with his long-anticipated tariff measures. Dubbed “Liberation Day,” Trump’s self-imposed deadline led to a temporary BTC surge before the market settled into losses.
Tariff Announcement Sparks Initial Bitcoin Surge
During Trump’s speech from the White House Rose Garden, Bitcoin spiked to $87,800, responding to the bold economic measures announced. However, the rally was short-lived, as BTC quickly retraced to $85,500, reflecting a 1.1% decline in the past hour, according to CoinGecko.
The tariffs include a 25% levy on all foreign-made automobiles, along with “reciprocal tariffs” on countries charging levies on American goods. Additionally, a 10% “minimum baseline tariff” will be applied to foreign nations accessing U.S. markets. While Trump emphasized that these actions would protect American industries and taxpayers, the immediate impact on financial markets—especially cryptocurrencies—was palpable.
Bitcoin Future Price Action Amid Tariff Uncertainty
The ongoing trade war rhetoric has contributed to Bitcoin’s volatility in recent weeks. Analysts suggest that tariffs could either stoke inflation—making Bitcoin an attractive hedge—or cause economic slowdowns, which might dampen investor sentiment.
White House Press Secretary Karoline Leavitt stated on Tuesday that the tariff rollout was still being finalized, leading to uncertainty in financial markets. This ambiguity contributed to a whipsaw effect in Bitcoin’s price as traders reacted in real-time to Trump’s economic stance.
Market Analysts Weigh In
Thomas Perfumo, a global economist at Kraken, noted that markets had already priced in much of the tariff uncertainty. He stated, “While headlines around ‘Liberation Day’ and the associated tariff measures continue to generate unease, much of the expected impact appears to have already been absorbed by the crypto market.”
Despite the dip, Bitcoin remains resilient, having recovered from last month’s lows of $77,000. However, the Federal Reserve’s monetary policy response to inflationary pressures stemming from tariffs remains a crucial factor to watch. If the central bank maintains high borrowing costs, risk assets like Bitcoin may continue facing downward pressure.
What’s Next for Bitcoin?
Trump’s tariff policies are likely to continue influencing crypto market dynamics. As traders assess the long-term economic consequences, Bitcoin’s price movements may remain unpredictable. Whether BTC serves as an inflation hedge or succumbs to broader market trends will depend on how these policies shape the global economic landscape in the coming months.
