Donald Trump’s tariff policies have sent ripples across global markets, with significant implications for both traditional finance and the cryptocurrency sector. As the administration rolls out measures like the “Liberation Day” tariffs—unexpected reciprocal tariffs with several countries—the economic landscape is shifting.
Will BTC and the crypto market reclaim what people called a “future asset” or just slip gradually in this cycle?
General Impact and Consequences of Tariffs on Traditional Markets
Trump’s tariffs, aimed at protecting U.S. industries and reducing reliance on foreign goods, have jolted the global economy. The steeper reciprocal tariffs announced for April 9 have sparked widespread uncertainty.
Overall economics market
Traditional financial markets, including stocks, have slumped, with some indices falling to levels last seen in 2023 during the onset of rate hikes. This reflects a “risk-off” sentiment as investors brace for higher costs, disrupted supply chains, and potential retaliation from trading partners.
Source: Reuters
Economists warn that these tariffs could fuel inflation by increasing the price of imported goods, a concern amplified by the U.S.’s already substantial fiscal deficit. A market selloff with billions wiped from valuations underscores the tariffs’ immediate destabilizing effect on equities and commodities. For traditional finance, this policy signals a protectionist shift that could erode global trade norms, impacting everything from corporate earnings to consumer prices.
Impact of Trump’s Tariffs on Currency Values
Trump’s tariffs have also shaken up global currency markets. As the U.S. imposes steep import taxes—like the 10% baseline and higher reciprocal tariffs—many countries’ currencies are losing value against the USD. This happens because tariffs boost demand for dollars as nations pay for pricier U.S. goods or pivot to American suppliers, strengthening the USD relative to currencies like the euro or yen.
However, the USD isn’t reigning supreme everywhere. It’s actually weakening against the Swiss franc (CHF). Why? Switzerland’s safe-haven status shines during this trade turmoil. Investors flock to the CHF, a historically stable currency, as tariffs spark fears of inflation and economic uncertainty globally. Switzerland’s franc, with its neutral stance and robust financial system, outperforms the USD, despite the latter’s exertions elsewhere.
Massive Consequences for CryptoShort-Term Fear and Massive Sell-Offs
In the crypto market, the tariffs have triggered an immediate wave of fear and selling pressure. Recently, the fear and greed index for crypto has ranged from fear to extreme fear, indicating the instability of investors’ minds.
Source: Binance Square
Bitcoin BTC, often viewed as a barometer for crypto sentiment, dropped 6% on the day of the tariff announcement. Although BTC’s price later saw a slight increase, it plummeted to $77,000 early this week. This reflects the top cryptocurrency’s sensitivity to macroeconomic news, particularly amid the looming threat of a trade war.
As a “risk asset” generally, crypto tends to suffer when macroeconomic uncertainty rises, and Trump’s policies have amplified this dynamic. The prospect of tariff-driven inflation has spooked investors,