After the U.S. tariffs, the crypto market saw a massive downturn. President Trump recently imposed extensive global tariffs, causing significant disruption to conventional stock markets. As trade tensions rose, investors sold off risky assets in a broad crypto and equity market sell-off.
On the night of April 5, the Trump administration announced a blanket 10% tariff on all imports, while some countries faced 434% and 24% tariff rates, such as China at 4%, the EU, and Japan at. The announcement triggered a sharp decline in prices when U.S. stock futures opened on April 6.
Bitcoin fell more than 6% in less than 24 hours to briefly trade near 77,883. Ether fared worse, plunging more than 121,575. The total worth of all cryptocurrencies shrunk by more than 8 percent to a trillion that both coins have.
The mood in the market deteriorated sharply, with the Crypto Fear & Greed Index falling to 23 (“extreme fear”). Analysts said that low trading volumes on Sundays increase volatility, allowing a few large trades to depress prices quickly.
As per BTC Markets’ Charlie Sherry, it’s the tariffs proposed by Trump that are the main reason behind the chaos since they have created market uncertainty.
Even though the prices have decreased, people are still hopeful. Arthur Hayes, a co-founder of BitMEX, has suggested that the tariffs may result in a Bitcoin rally.
Traditional markets were equally battered. Futures for the S&P 500 fell by almost 4%, while Nasdaq saw a significant drop, and the Dow Jones futures went down by over 8%. If things go on like this, things will go deep into bear territory for the US indices, warns the analyst.
Trump defended his policy during a press appearance, stating that tariffs are like “medicine” that has to be imposed. He said the measures are already producing a lot of money for the country.
In social media, Trump went further, dubbing the tariffs a “beautiful thing” and insisting they’re needed to reduce deficits with China and the EU, among other countries. He was unconcerned, as it may cause harm to the market but may do good later.
Within the administration, officials echoed Trump’s stance. More than 50 countries have contacted us to renegotiate, which shows that our strategy is working, National Economic Council Director Kevin Hasselt said. US Treasury Secretary Scott Bessant told its trading partners to not retaliate, adding that the US will not raise the tariffs if others will not retaliate.
As the markets deal with the impact of Trump’s move, stakeholders are watching closely to see whether this economic medicine will stabilize or further destabilize the world economy.
