As part of his newest attack in the continuing trade war, US President Donald Trump declared a national emergency and imposed sweeping tariffs on all nations, which caused cryptocurrency markets to plummet.
Beginning on April 5, all nations will be subject to a 10% tariff imposed by the Trump administration; other nations will be subject to significantly higher rates, such as China (34%), the European Union (20%), and Japan (24%).
In a speech held in the White House Rose Garden on April 2, Trump said that the United States is charging nations “roughly half of what they are and have been charging us.”
The news of a 10% sweeping tax caused the cryptocurrency market to briefly rise, but as soon as the full extent was revealed, it fell with widespread hemorrhage.
Following a rise that saw it hit a session high of $88,500, Bitcoin (BTC) fell 2.6% to near $82,876. According to the report, the total cryptocurrency market capitalization fell 5.3% to $2.7 trillion after the tariff announcements, and Ether (ETH) fell more than 6% from $1,934 to $1,797.
In its most recent update on April 2, the Crypto fear & Greed Index, which gauges market sentiment for Bitcoin and other cryptocurrencies, recorded a score of 25, which is categorized as extreme dread.
Prices have since recovered some of their losses, though. Bitcoin is now worth $83,205, up 0.8%. In contrast, Ether recovered 1.2% to recover $1,810.
Trading resources did not fare much better than stock markets. According to a post made by the Kobeissi Letter to X on April 2, the S&P 500 stock market index erased almost $2 trillion in market capitalization, or around $125 billion every minute.
Trump tariffs may provide markets with stability
Crypto analyst Rachael Lucas of the Australian cryptocurrency exchange BTC Markets explained the brief spike as “uncertainty relief,” followed by a sell-off after the complete tariff information were made public.
As local traders frantically tried to reposition themselves, trading volume on crypto markets increased by 46%. She noted in a statement that while smaller investors resisted the surge, major players profited.
She also said that another bout of panic selling is to be expected if China or the EU “hit back hard.”
In an interview on April 2, US Treasury Secretary Scott Bessent counseled US trade partners against retaliatory actions, stating that “this is the high end of the number” for tariffs if they do not attempt to impose further taxes in response, which might give markets a “ceiling” and clarity.
Markets saw a great deal of volatility during Trump’s address, but the clarity might prove advantageous in the long run, according to David Hernandez, a crypto investing specialist at crypto asset manager 21Shares.
“The announcement gave much-needed clarity on the scope and scale of the policy, even though the tariff rates were a little higher than anticipated,” he said.
In the days ahead, institutional investors might perceive a chance to profit from reduced valuations since markets thrive on clarity and speculation is now mostly eliminated.
Mexico and major East Asian nations, such as China, South Korea, and Japan, may be considering countermeasures, Hernandez says, adding that global reactions will be crucial for the market moving ahead.
