Bitcoin Under Pressure: The Impact of Trump's Tariffs on Market Stability - Metaverse Post

Mounting concerns among investors regarding President Donald Trump’s upcoming tariffs triggered a wave of selling activity on Friday, negatively impacting risk-sensitive currencies such as the Australian dollar and pushing Bitcoin significantly lower, while causing a surge in demand for safe-haven assets like the U.S. dollar.  a broad sell-off Trump declared on Thursday that his intended 25% tariffs on goods from Mexico and Canada would take effect on March 4, along with a 10% increase on Chinese imports. This announcement dashed any remaining hopes that the administration might postpone these measures.

As the trading day progressed, the prevailing risk-off sentiment intensified, with cryptocurrencies becoming some of the most adversely affected assets, with Bitcoin hitting its lowest value since November. Ethereum similarly experienced a substantial drop.

Crypto Taking a Hit

Both Bitcoin and Ethereum appear headed for their largest monthly losses since June 2022, following a notable rally that occurred towards the end of the previous year, which was largely driven by hopes that a pro-crypto Trump administration would positively impact the market.  BTC reached a low of $79,000 Joshua Chu, co-chair of the Hong Kong Web3 Association, pointed out that Bitcoin dipping below $80,000 indicates that the once optimistic sentiment fueled by prominent endorsements and a crypto-friendly government has faded.  barely scraping above $2,000 .

Meanwhile, the euro experienced difficulties, plummeting to a two-week low of $1.038 before bouncing back to 1.07. Sim Moh Siong, a currency strategist at the Bank of Singapore, explained that the tariff anxieties disrupted the markets, shaking off any earlier complacency.

Trump's statements eliminated the last shreds of hope for a last-minute agreement that would prevent the full implementation of tariffs on Mexico and Canada. On Sunday, Treasury Secretary Scott Bessent confirmed that Mexico had suggested matching the U.S. tariffs on China to avoid facing the new levies, urging Canada to follow suit.

At the same time, Commerce Secretary Howard Lutnick stated in an interview that the tariff plan concerning Mexico and Canada remained 'fluid,' implying that the 25% tax might be adjusted downwards from the initial proposal.

The mounting concerns regarding tariffs heavily impacted Wall Street, leading to its first monthly decline of the year in February, with the Nasdaq hovering near a 10% decrease from its all-time high and marking its worst month since April 2024 with a 4% fall. In reaction to Trump’s tariff announcement, which imposed a 25% levy on Canada and Mexico along with elevating tariffs on Chinese imports to 20%, investors sought to shield themselves by retreating from riskier assets. Compounding worries arose as markers of economic strain, like U.S. factory prices reaching their highest levels in nearly three years and ongoing supply chain issues, became apparent. Bitcoin lost its weekend gains and was trading between $82,000 and $85,000 as investors began to assess the implications of the new tariffs. Market instability could persist as the tariffs began to take effect later that day.

The discussion regarding the establishment of a U.S. Crypto Strategic Reserve, which would include Bitcoin, Ethereum, XRP, Solana, and Cardano, with Bitcoin and Ethereum at the forefront, reignited excitement within the crypto markets.

This announcement sparked a temporary rise in Bitcoin, boosting it by 10% to reach $92,000. Cardano also saw positive movement.

The Market Reaction

However, these gains proved short-lived as uncertainty surrounding the implementation plan, coupled with worries about regulatory challenges, triggered a rapid price reversal.

Vikram Subburaj, Giottus’ CEO,  remarked The crypto market, known for its volatile price movements, faced an abrupt shift as initial enthusiasm waned, leading traders to question the real-world implications of Trump's proposal.

On Monday,  Trump’s announcement Research revealed that inflation and tariffs are significant concerns for institutional investors in 2025. Over half the survey respondents acknowledged their profound impact on the global financial landscape.

Although concerns about an economic downturn have lessened, attention has shifted towards the increasing costs of doing business and the unstable market created by persistent tariffs and inflation.  an impressive 64% jump to $1.13 , with XRP climbing 26% to $2.80 and Solana up by 17%.

The survey indicated a notable surge in apprehensions related to tariffs and inflation over recent years. In 2024, 27% of participants cited these as their primary worries; however, that number has now surged to 51%.

The current economic climate clearly illustrates that future investment decisions will largely hinge on legislative outcomes, prompting both businesses and investors to seek alternatives as fiat currencies continue to lose value due to inflation.

Inflation and Tariffs Not Over Yet

A  recent survey by JPMorgan Chase Especially Bitcoin and other cryptocurrencies are regarded as possible solutions since they offer decentralized protection largely unaffected by traditional government regulations. Many view digital assets as a reliable buffer against the ongoing volatility stemming from inflation.

Is Bitcoin Capable of Serving as an Effective Hedge Against Inflation?

Tariffs aren't a new concept; they've been used historically by governments to protect domestic industries, gain leverage in trade negotiations, or increase revenue. However, historical records show that tariffs frequently contribute to inflation.

This raises a crucial inquiry: Can Bitcoin act as a safeguard when tariffs elevate prices?

Some, including Bitcoin investor Michael Saylor, regard Bitcoin as

an effective shield against inflation. Its limited supply coupled with its decentralized attributes makes it especially appealing during times of economic challenge.

This led to Bitcoin trading volumes doubling as individuals sought to preserve their wealth amidst the devaluation of the peso.

Scarcity in a Print-Happy World: Unlike traditional currency, which governments can issue in unlimited quantities, Bitcoin is capped at 21 million coins. Its inherent scarcity significantly shields it from inflationary trends, especially during market turmoil prompted by tariffs.

A Store of Value: Over the last decade, Bitcoin has outperformed typical assets, delivering returns exceeding 20,000%. Its detachment from governmental influence means that while tariffs may incite inflation and create fluctuations in national currencies, Bitcoin remains insulated from such impacts. Decentralization: Operating beyond governmental control, Bitcoin remains impervious to trade conflicts and currency volatility. This independence is particularly valuable during uncertain economic times. Global Accessibility: Anyone with an internet connection can buy Bitcoin, which makes it particularly useful in regions with unstable national currencies or limited banking infrastructure. As tariffs raise prices and complicate foreign trade, Bitcoin presents an option for individuals and businesses to conduct cross-border transactions free from governmental restrictions or conventional banking systems.

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• While its volatility, relative obscurity, and legal ambiguities currently imply a minimal impact, Bitcoin has potential as an inflation hedge. Compared to gold, which offers less speed and global reach, Bitcoin could serve as a complementary asset in navigating an unpredictable economic landscape.
• Please be advised that the information provided on this page is not intended to be, nor should it be construed as, legal, tax, investment, financial, or any other form of advice. It's crucial to invest only what you can afford to lose and to seek independent financial guidance if you have any uncertainties. For further insights, we recommend referring to the terms and conditions, as well as the help and support resources provided by the issuer or advertiser. MetaversePost is dedicated to delivering accurate and impartial reporting; however, market conditions may change without prior notice.
• Alisa, a committed journalist at the Cryptocurrencylistings, concentrates on cryptocurrency, zero-knowledge proofs, investments, and the broad domain of Web3. With a sharp eye on emerging trends and technologies, she provides thorough coverage designed to inform and engage readers in the rapidly evolving world of digital finance.
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