Since US President Donald Trump’s inauguration on January 20, Bitcoin (BTC) has experienced significant fluctuations, peaking at a record high of $109,000 before plummeting below $78,000. Major tariff announcements from the US, alongside retaliatory actions from trade partners, have severely impacted the cryptocurrency market, resulting in heightened global market volatility.
According to Justin d’Anethan, head of sales at Liquify, “The back-and-forth on tariffs, with Trump sometimes tough and sometimes accommodating, has left markets in a limbo state, where few people are willing to be decidedly bullish but just as few are willing to part with their assets, fearing to be left on the sidelines at the next rally.” Indeed, the uncertainty surrounding tariffs has contributed to investor hesitance and market fluctuations.
Colombian Tariff Standoff and Market Disruptions
In late January, Bitcoin hovered above $100,000 until Trump threatened a 25% tariff on all Colombian imports in response to Colombia’s refusal to accept US deportees. Following a brief period of heightened tension, Colombia reversed its position, allowing Bitcoin to regain stability above $100,000. However, the emergence of Chinese AI firm DeepSeek introduced new concerns, disrupting market sentiment across the board.
Escalating Tariff Wars and Bitcoin Losses
February marked the beginning of a significant escalation in US tariff policy. On February 1, Trump signed an executive order implementing 10% tariffs on Chinese imports and 25% on Canadian and Mexican goods. These measures led to an immediate downturn for Bitcoin, which fell below $93,000, and its value only briefly recovered following a temporary suspension of tariffs on Canada and Mexico. Ultimately, the scheduled implementation of Chinese tariffs marked a critical turning point, resulting in Bitcoin slipping below $100,000 and continuing on a downward trajectory thereafter.
Further compounding the pressure, on February 25, Trump called for a review of potential tariffs on imported copper, which led to Bitcoin dipping below $80,000 for the first time since November. The combination of tariff-related uncertainties, market disruptions, and significant breaches such as the Bybit hack adversely impacted Bitcoin’s value.
Signs of Recovery in March
As March unfolded, there was a notable softening of the administration’s tone towards tariffs, signaling potential relief for the cryptocurrency market. Trump’s announcement of plans for a Strategic Bitcoin Reserve raised hopes, and subsequent reports indicated a more targeted approach to tariffs, which sparked a modest recovery in Bitcoin’s value.
Looking Ahead: The Impending ‘Liberation Day’
As April 2 approaches—a date referred to as ‘Liberation Day’—investors are bracing for potential heightened market volatility and corporate lobbying for tariff exemptions. Analysts predict that the implementation of tariffs could lead to inflation spikes and further disruptions across supply chains, which have historically had ripple effects on the cryptocurrency market.
Market observers underscore the importance of monitoring ongoing developments, noting Bitcoin’s increasing correlation with traditional financial indices. As Trump continues to hint at new tariffs on various imports, including automobiles and pharmaceuticals, the future of Bitcoin remains uncertain in light of ongoing tariff negotiations and geopolitical developments.
In conclusion, the interplay between trade policies and cryptocurrency valuations underscores the need for investors to stay informed and agile in a fast-paced market landscape.
