The announcement by the 47th President of the United States, Donald Trump, to increase tariffs on imports from the EU, Canada, China, and Mexico caused a wave of upheaval in the crypto market, leading to strong volatility and a decline in prices. While at the beginning of the year, BTC was worth $109 thousand, now it is worth $82 thousand (-25.3%). But before that, the price dropped to $77 thousand. Both longs and shorts are losing money in these waves. On April 7, traders’ positions worth more than $1.5 billion were liquidated. After the latest bounce, liquidations reached $463 million. Traders have been living in great uncertainty for the past month. However, experts hint at potential long-term benefits from Trump’s actions.
No wonder experts have noted that Trump’s tactics resemble Martingale’s strategy, when a gambler doubles his bets for each retaliatory move until he wins.
In March 2025, the US President imposed a 25% tariff on all foreign-made cars to support the national bus industry. This happened against the backdrop of previous plans for «reciprocal tariffs», which were to take effect on April 2. They concerned 15 countries, including China, Canada, and Mexico. Economists warnedThe report said that this could reduce economic growth by 2% and cause inflation.
Bitcoin, which soared above $100,000 in early 2025, fell to $80,000 by the end of March, and the total market capitalization of cryptocurrencies also declined, repeating a similar drop in February, when rumors of US import tariffs first surfaced. Shares of cryptocurrency companies fell: Strategy (MSTR) lost 7% of its value, and Coinbase Global (COIN) — dropped 6%.
In late March, there was a glimmer of hope when Fortune Crypto reportedthat Trump might reduce tariffs. This caused a 3% jump in the price of bitcoin.
The joy of traders and investors was short-lived. Trump promised to impose 104% tariffs on Chinese imports. The market went downhill again.
However, suddenly (no) the American leader announced a 90-day pause in the introduction of tariffs.
Interestingly, before that, the US president hinted at a good time to buy crypto. He wrote about it on his social network Truth Social.
Despite the fact that no one is going to cancel China’s 84% tariffs on American imports, the market reacted with growth. After spending several days in the $77,000 zone, bitcoin rebounded to $81,000. Other tokens are also turning green.
In general, analysts have mixed views on the impact of the tariff war on the cryptocurrency market. Zach Pandle, head of research at Grayscale believesthat, although the consequences were negative, the tariffs may eventually weaken the global dominance of the US dollar. In this scenario, bitcoin could strengthen its role as «digital gold».
Professor of Columbia Business School Omid Malekan supported this opinion, suggesting that prolonged trade wars will make BTC a hedge against the volatility of the traditional market.
Instead, the short-term outlook remained bleak. Bitcoin’s drop from almost $110 thousand at the beginning of the year indicates the market’s volatility.
Financial analyst Dr. Kirill Kretov saidthat the tariff wars have revealed a strong dependence of cryptocurrencies on overall economic stability. This suggests a low probability of a quick recovery.
Kretov’s research for the period from July 2020 to March 2025 revealed a large wave of asset withdrawals that began in late November 2024. This trend is especially noticeable among addresses that made transactions of 100 to 10,000 BTC, indicating the involvement of large institutional players or whales. In other words, BTC is losing liquidity.
Trump’s tariffs in March 2025 shook up the cryptocurrency market, causing significant volatility. But this is only a short-term trend. Most experts talk about positive opportunities in the long term.
For example, CryptoQuant’s analysis showed that the current market correction is much weaker than in 2021. The chart below shows how the price was affected by the mining ban in China (bitcoin dropped by 53%), the FTX exchange collapse in 2022 (down 75%), and Trump’s tariff war (BTC corrected by 28% from its historical high).