Cryptocurrencies in turmoil: Trump's tariffs and their impact on markets

Cryptocurrencies in turmoil: Trump's tariffs and their impact on markets

In recent days, crypto markets have been in turmoil as US President Donald Trump announced the imposition of tariffs on imports from many countries. The move, referred to as a state of national emergency, sparked an immediate reaction in the cryptocurrency market, whose prices plunged due to investor concerns.

According to crypto asset investment specialist David Hernandez of 21Shares, the markets are facing high volatility, but the clarification of the tariffs could have a positive impact on the market in the long run. Although cryptocurrencies have reacted to the news with a sharp decline, Hernandez believes that greater clarity on tariff policy may calm the situation and attract the attention of institutional investors.

Donald Trump, during his White House Rose Garden speech, pointed out that the US is now implementing 10% tariffs, with some countries like China, the European Union and Japan facing even higher tariffs. These measures led to a rapid increase in trading volume on cryptocurrency exchanges as investors sought to adjust and reposition themselves.

Shortly after the tariffs were announced, bitcoin climbed to $88,500, but subsequently fell 2.6% to around $82,876. Ether (ETH) fell more than 6% from $1,934 to $1,797, and the total market capitalisation of cryptocurrencies fell 5.3% to $2.7 trillion. The Crypto Fear & Greed Index, which tracks market sentiment, showed extreme fear with a rating of 25.

Fortunately, prices have begun to stabilize; bitcoin has returned to $83,205 and ether to $1,810. Meanwhile, stock markets have also experienced turbulent times, with the S&P 500 index losing more than $2 trillion.

Rachael Lucas, a crypto-analyst at BTC Markets, pointed out that the short-term surge in prices was a sign of relief from uncertainty, but fears of retaliation from China or the EU could trigger further market panic.

U.S. Treasury Secretary Scott Bessent expressed hope that U.S. trading partners would avoid retaliation, which could provide much-needed stability to the markets. Hernandez's view that clarity on tariffs could bring new confidence confirmed that markets thrive on certainty and the removal of speculation.

Looking ahead, the key will be how global economies react to the measures, and whether Mexico and key East Asian countries decide to respond with countermeasures. Cryptocurrency markets thus stand at a crossroads, although some voices suggest the possibility of stabilisation and a return to growth.

*This is not an investment recommendation.

Coingarage Team