In this post:
- Jeff Park, the head of alpha strategies at BitWise, argues that Trump’s tariffs will send BTC prices ‘violently higher’ in the long term due to a weakening of the U.S. dollar.
- James Butterfill, CoinShares’ head of research, said tariffs were negative for Bitcoin in the short run because BTC reacted to economic trends and liquidity cycles.
- Bitcoin’s correlation with the NASDAQ is about 40%, well below its peak of 72%, and it can decouple to act as a safe haven–this is the paradox of Bitcoin, it can be a volatile asset and a safe haven.
Jeff Park, the head of alpha strategies at BitWise, argues that Trump’s tariffs will send BTC prices ‘violently higher’ in the long term due to a weakening of the U.S. dollar. However, CoinShares’ head of research James Butterfill predicts that tariffs could be negative for Bitcoin in the short run because BTC reacted to economic trends and liquidity cycles.
Marcin Kazmierczak, the chief operating officer at RedStone, said the declines across the crypto markets point to a growing correlation between digital assets and macroeconomic policy shifts. Given that Bitcoin is classified as a commodity in many countries, especially the United States, it is worth examining how new U.S. tariffs could affect Bitcoin and the broader crypto market. According to recent crypto research, Bitcoin showed initial signs of resilience after Trump’s tariff announcement.
Bitcoin prices exhibit mixed reactions post-tariff announcements
The tariffs announcements caused significant commotion in both traditional financial markets and the crypto market. CoinShares’ Butterfill believes tariffs will be negative for Bitcoin in the short run because unlike gold, BTC has a growth component, meaning it reacts to economic trends and liquidity cycles. However, BitWise’s Park argues that Trump’s tariffs will send BTC prices ‘violently higher’ in the long-term due to a weakening of the U.S. dollar. Initially, tariffs could: slow economic growth, thus reducing demand for Bitcoin; increase inflation, which could lead to speculation on higher interest rates; or cause Bitcoin’s price to drop temporarily—as it often correlates with equities.
Bitcoin’s correlation with the NASDAQ is about 40%, well below its peak of 72%, but it can decouple to act as a safe haven–which is the paradox of Bitcoin where it can be both a volatile asset and a safe haven. For instance, BTC dropped below $76K after the U.S. imposed an additional 50% tariff on China, bringing the total trade levy on Chinese goods to 104%. However, several crypto experts suggest that Bitcoin could see tremendous growth–despite the immediate price dip–if the U.S. Dollar (USD) continues to plummet and lose credibility as a reserve asset.
Bitcoin reportedly showed the first signs of resilience in February after Trump announced a 10% ‘baseline’ tariff on imports to the U.S., and higher tariffs for select countries. Binance CEO Richard Teng also stated that Bitcoin could recover despite the recent risk-off sentiment from investors. He noted that while short-term macro uncertainty led investors to pull back, Bitcoin still held strong recovery potential.
“If tariffs weigh on GDP without triggering a fresh inflation spike, the Fed may have scope to cut rates — reintroducing the liquidity conditions under which Bitcoin has historically excelled.”
- Mathew Sigel, head of Digital Assets Research at VanEck
Bitcoin’s price according to on-chain data increased around 2% between 31 March and 4 April post-Trump’s tariff announcement. Additionally, the five-day volatility for BTC during the first week of April 2025 was around 2.3%, less than the 2.9% to 3.5% of the three major indices–the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average indices which recorded significant declines of -9.08%, -10.02% and -7.86%, respectively (according to Google Finance).
Tariffs extend impact to altcoin prices as the broader crypto market plunges
The altcoin market turbulence following Trump’s announcement of impending tariffs on imported goods triggered widespread risk-asset sell-offs. Rachael Lucas, a crypto analyst at BTC Markets, observed that the lack of Federal Reserve stimulus and persistently high interest rates disproportionately impacted altcoins, leading to deeper losses.
February’s data from CoinMarketCap showed that altcoins took the brunt of the beating, with large-cap staples Ether, SOl and XRP falling by roughly 11.6%, 19.3% and 16.6% respectively as crypto markets tumbled in reaction to President Trump’s announced tariffs on Canada, China and Mexico.
As of Wednesday, April 9, 2025, Ethereum (ETH) hit its lowest price in two years, dipping below $1.5K, down from a high of $4.1K in December 2024—a 64% drop. CoinMarketCap data revealed that Ether (ETH) dropped 10% in the past 24 hours, leading losses among major tokens, with xrp (XRP), dogecoin (DOGE), BNB Chain’s BNB, Solana’s SOL and Cardano’s ADA falling more than 5%. Smaller tokens showed even deeper losses, with upstart Berachain’s BERA falling 20% and memecoins bonk (BONK), pepe (PEPE) and floki (FLOKI) plummeting more than 9%. Overall market capitalization decreased 6%, extending the 7-day decline to nearly 15%.
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