Bitcoin and the cryptocurrency sector as a whole have been rocked by President Donald Trump’s decision on Tuesday to raise planned tariffs on Canadian imports to an astounding 50%.
CoinMarketCap’s Fear and Greed Index plummeted to “extreme greed” on Tuesday, hitting 15, following the news, indicating a significant shift in market mood.
Bitcoin’s value has also fallen by more than 24% in recent weeks after reaching its peak of over $109,000 before Trump’s inauguration.
Crypto is suffering as a result of Trump’s tariffs, which are causing a market shockwave. Investors are in complete panic mode as the Fear & Greed Index touched [15], which is lower than it was after the Bybit hack last week, according to Alice Liu, Head of Research at CoinMarketCap. However, given how Bitcoin has historically responded to macrouncertainty, this pullback may not last long.
According to Todd Ruoff, CEO of Autonomys, the U.S. administration’s placement of significant tariffs on Canadian steel and aluminum has caused financial markets to become volatile, with noteworthy price changes for cryptocurrencies like Bitcoin. This development emphasizes how the crypto ecosystem and international economic policies are intertwined.
According to Kraken, the price of Ether moved to $1,908 on Tuesday, while the price of Bitcoin hovered at $82,000. At the moment, XRP is selling at $2.13, while other well-known cryptocurrencies, such as Dogecoin, are trading at $0.16.
Trump’s official memecoin fell to $10.38 on Tuesday as well.
Global markets are being shaken by Trump’s tariff rant, and cryptocurrency is feeling the effects, Douro Labs CEO Mike Cahill told. Investors are rushing to reduce risk when these headline-driven shocks occur because they create a great deal of uncertainty. DOGE, Ethereum, and Bitcoin are all being pulled along with a larger flight from instability.
Even though Bitcoin and gold have a 70% correlation, Cahill noted that under stress, Bitcoin still acts like a risk asset, meaning it moves quicker and with greater force in both directions. Despite their apparent traditional commerce nature, tariffs have a significant impact on commodities, cryptocurrencies, and stocks. The true irony is that, although being intended as a hedge against this type of market volatility, cryptocurrency really trades more like a tech stock than a digital hold during times like these. We will continue to see these razor-sharp whipsaws cutting through risky assets until the dust settles.
Concerns about interest rates are also being exacerbated by trade tensions: Sid Powell, CEO of Maple Finance, told that if tariffs push prices higher, there is a fear that the Fed will maintain higher rates for longer, which is bad for risky assets like Bitcoin and cryptocurrency.
But according to other experts, the effect of the trade war on cryptocurrency prices is not unexpected: Jeff Feng, a co-founder of Sei Labs and a former investment banker at Goldman Sachs, told that uncertainty and instability in international trade policy usually have an impact on cryptocurrency markets. Investors may also temporarily penalize digital assets if tariffs interfere with conventional supply networks and finance.
“Bitcoin hasn’t lived up to its potential as a volatility hedge,” Feng continued. Traditional markets and digital assets are nonetheless correlated, despite institutional acceptance and legal certainty. Blockchain-native deployment for international trade, however, might be accelerated by dissatisfaction with conventional financial rails and markets.
