Trump’s Tariff Plans Impact Crypto Market Volatility

Trump’s Announcement and Market Reaction

Donald Trump, the current President, announced plans for a 100% tariff on Chinese goods, underpinning claims that revenue would fund dividends to Americans. The announcement triggered significant reactions in financial and crypto markets.

Following the tariff news, Bitcoin experienced volatility, reaching lows of $104,000 before rebounding. Altcoins like Ethereum and XRP also saw sharp declines of up to 30%.

Immediate Effects on the Crypto Market

The announcement’s effects were immediate, causing a massive sell-off and creating tension across markets. Over $20 billion in crypto positions were liquidated within 24 hours.

Experts express skepticism about the sustainability of funding both a national debt reduction and a dividend through tariffs, citing lack of detailed budgetary evidence. Erica York shared her insights on this matter on her Twitter profile:

Chris Mellor, Head of ETF Product Management, Invesco, “Bitcoin now trades like a high-beta macro asset; it reacts to global trade policy, inflation data, and central bank signals. That’s a sign of integration, not immaturity.”

Geopolitical Sensitivity of Digital Currencies

Market reactions highlight increased sensitivity to geopolitical events. Trump’s aggressive trade policies are impacting digital currencies significantly.

Analysts suggest such events are now integral to cryptocurrency movements, indicating a maturing correlation with macroeconomic policies. Daniel Parreira noted that the sell-off was more mechanical than a reflection of blockchain fundamentals.