Why Trump Tariffs? How Will This Affect The Crypto Market?
Introduction
Trump’s tariff policy in 2025 has triggered global financial turmoil, with the cryptocurrency market hit hardest - Bitcoin plummeted by 7%, while other currencies suffered even greater losses. This article will introduce you to Trump’s tariff policy, analyze why Trump is imposing tariffs, and provide you with strategies to deal with the market fluctuations caused by tariff policies.
Why does Trump impose tariffs?
On April 2, 2025, President Trump announced a major tariff policy change to reshape global trade relations. The core of this policy includes a 10% basic tariff on all imported goods, as well as higher tariffs ranging from 11% to 50% on 57 countries and entities. These measures took effect on April 5 and 9, respectively.
The Trump administration said that these tariffs are aimed at addressing the long-standing trade deficit issue in the United States, protecting domestic manufacturing, and enhancing America’s economic competitiveness. It is worth noting that the tariffs on China are more severe, increasing by an additional 34% on top of the existing 20%, resulting in an actual tariff rate of up to 54% on imported goods from China. Additionally, Trump also imposed a 25% tariff on Canada and Mexico, although later granted an indefinite exemption to goods compliant with the USMCA agreement.
Some media analysis believes that Trump’s tariff policy is mainly aimed at promoting the return of manufacturing, forcing companies to move production lines back to the United States to revitalize domestic manufacturing; reduce trade deficits, thereby improving the international trade balance of the United States; and restructuring global economic rules.
How does Trump’s tariff policy affect the crypto market
Trump’s tariff policy in 2025 has had a profound impact on the crypto market, triggering concerns among investors and intense market fluctuations. The announcement of the tariff policy has led to Bitcoin price In the past 24 hours, it plummeted by about 7%, dropping from over $80,000 to around $77,500. Other major cryptocurrencies such as Ethereum and SOL experienced even larger declines, falling by about 12% during the same period. The total market value of the entire cryptocurrency market evaporated by about 7% in a single day.
One key factor in the impact of Trump’s tariffs on cryptocurrencies is their increasing correlation with traditional financial markets. With more institutional investors participating in cryptocurrency trading, this correlation has significantly strengthened in recent years. When global stock markets plummeted due to tariff news, the cryptocurrency market followed suit. Dow Jones Industrial Average futures fell by over 4%, S&P 500 futures by nearly 5%, and Nasdaq 100 futures by 5.3%. This synchronous decline indicates that the cryptocurrency market is closely linked to the broader financial ecosystem.
The long-term impact of tariff policies on Bitcoin and other cryptocurrencies
Although the short-term impact of tariff policies is evident, its long-term effects may be more complex and far-reaching. Some analysts believe that Trump’s tariff policy may ultimately have a positive impact on Bitcoin and other cryptocurrencies. The basis of this view is that tariffs may weaken the dominance of the US dollar and create opportunities for alternative currencies such as Bitcoin.
Grayscale’s head of research, Zach Pandl, said, “I think tariffs will weaken the dominance of the US dollar and create space for competitors, including Bitcoin. The price has dropped in the short term. But the Trump administration’s first few months actually strengthened my long-term belief in Bitcoin as a global currency asset.” This view reflects some people’s belief that in a more diversified global trade relationship, investors may seek alternatives to the US dollar.
However, tariff policies may also have some negative long-term impacts on the cryptocurrency industry. For example, if tariffs lead to a global economic slowdown, it may reduce overall investments in risk assets, including cryptocurrencies. Additionally, if tariff policies trigger a broader trade war, it could increase the complexity of cross-border transactions, which may affect the adoption of some blockchain-based international payment solutions.
How to deal with market fluctuations caused by tariff policies?
In the face of the market volatility brought about by Trump’s tariff policies, cryptocurrency investors need to adopt a cautious and strategic approach. First, investors should reassess their risk tolerance and investment goals. During periods of intensified market volatility, maintaining calm and rationality is especially important.
Diversified investment strategies are particularly important in this situation. Investors may consider diversifying their investments into different types of cryptocurrencies, and even consider investing some of their funds in traditional assets such as gold or low-risk bonds to reduce the overall risk of the investment portfolio.
For long-term investors, short-term market fluctuations may provide buying opportunities. However, careful research and analysis of market trends and the fundamentals of various cryptocurrencies are crucial before making any investment decisions.
In addition, investors should pay close attention to changes in policies and regulatory environment. The tariff policy of the Trump administration may just be the beginning of a series of economic policy changes, which may have a sustained impact on the crypto market. Staying informed of the latest developments and adjusting investment strategies in a timely manner will be key to successfully dealing with market fluctuations.
Conclusion
Trump’s tariff policy has caused a violent fluctuation in the crypto market, leading to panic selling in the short term. However, in the long run, it may create opportunities for alternative currencies such as Bitcoin. Investors should remain calm, adopt a diversified strategy, closely monitor policy changes, adjust their investment portfolios in a timely manner to cope with market uncertainties.
Risk Warning: Changes in the global economic situation or regulatory policy adjustments may lead to the crypto market showing trends opposite to expectations.
