In recent days, Bitcoin has experienced a sharp decline, falling to its lowest level in nearly a month. This price decline comes after a series of events that significantly impacted global markets, including the imposition of tariffs announced by US President Donald Trump. These tariffs indirectly impacted global cryptocurrency and stock markets, creating a state of tension and anxiety among traders and investors. In this article, we will review the impact of tariffs on Bitcoin’s price and how cryptocurrency markets reacted to this decline.
The Impact of Tariffs on Cryptocurrency Markets
Cryptocurrencies began to come under significant pressure after Trump imposed heavy tariffs on China and the European Union, impacting global markets. As a result of these tariffs, cryptocurrency markets declined significantly. Bitcoin, the world’s largest cryptocurrency, lost approximately 7% of its value, reaching $77,171, its lowest level in nearly a month. With these losses, investors were worried, with some predicting that stock markets would experience a “Black Monday”—a crash similar to the one in 1987, when stocks suffered massive losses in a single day. Amid these fears, traders turned to safe havens such as gold and the Japanese yen, while risk appetite generally declined.
The Link Between Tariffs and Bitcoin Price Decline
Trump’s tariffs have led to a sharp decline in the market capitalization of global markets. Global stock markets have lost nearly $4 trillion since the tariffs were imposed last week. Meanwhile, cryptocurrencies have also been affected, with their market capitalization dropping by about $500 billion in the same period. These losses, linked to economic concerns, have been most pronounced in cryptocurrencies, which are considered high-risk assets.
Strong Volatility in Markets: Can the Decline Continue?
While Bitcoin has experienced a sharp decline, some traders have noted the potential for a sudden surge following this decline. Popular trader Daan Crypto Trades noted that Bitcoin volatility could decline further in the near future. This reflects a state of psychological pressure in the markets, as stock markets could have a negative impact on cryptocurrencies.
Meanwhile, trader Cass Abbey noted that the recent declines could be a false breakout, suggesting a market correction and price rise after a period of sharp declines.
The Opposing View: How Does Arthur Hayes View the Impact of Tariffs?
Despite the negative impact of tariffs on global financial markets, Arthur Hayes, co-founder of BitMEX, believes that tariffs could be beneficial for cryptocurrencies. He noted that Trump’s tariffs will lead to increased money printing by the US government, which will contribute to a boost in Bitcoin’s price.
According to Arthur Hayes, these measures could contribute to a weaker US dollar. Thus increasing demand for cryptocurrencies as alternative assets. This trend makes some investors believe that Bitcoin may be well-positioned to benefit from potential inflation in the global financial system.
The Impact of Tariffs on Altcoins (Bitcoin)
Along with Bitcoin, several other alternative cryptocurrencies have also been affected by the market downturn. Ethereum, the world’s second-largest cryptocurrency, fell 13% to $1,577.30. XRP also fell 11.4%, while coins like Solana, Cardano, and Polygon saw declines of more than 10% each.
These declines confirm that risk aversion has been widespread. As traders move away from assets considered high-risk at a time like this and turn to assets that offer relative safety, such as gold.
The Bitcoin Market and Factors Affecting Its Future
With Bitcoin prices declining, many traders are wondering about the near future of the largest cryptocurrency. Some analysts suggest that Bitcoin will continue to fluctuate due to economic uncertainty in global markets. On the other hand, others believe that Bitcoin could begin a sudden surge if inflation continues to impact the markets.
The relatively hostile stance of regulators toward cryptocurrencies (under Biden) was no less indicative of regulatory control than their permissive stance toward them today. The main difference lies in who carried out the takeover,” he said.
General Market Conditions: Are We Facing a “Black Monday”?
The significant decline in markets has led to widespread fears of a global market crash in the coming days. If US markets continue to decline, we could see a sharp decline in cryptocurrency markets as well. The correlation between stock markets and cryptocurrencies is strong, meaning any decline in stock markets could spill over into cryptocurrencies, especially given the widespread risk aversion.
Volatile Market Awaits Global Economic Stabilization
The future of stablecoins can only be based on the US dollar if we allow a wider group of stablecoin issuers to thrive and prevent gatekeeping/manipulation by those interested in regulatory takeovers.
Ultimately, the price of Bitcoin remains contingent on numerous economic and political factors. The impact of Trump’s tariffs is one of the biggest factors affecting markets recently, but opinions on the future of Bitcoin remain mixed. While some experts believe Bitcoin will benefit from these conditions, others believe the currency will face additional difficulties in light of global trade tensions. Given this situation, traders will remain in a state of volatility and anticipation. Waiting for the global economic picture to become clearer.
