Will Bitcoin (BTC) Bounce Back From the Trump Administration's Tariff War?

Lately, the crypto market hasn't lived up to expectations under the Trump Administration. While investors hoped that regulatory reforms and the Bitcoin Strategic Reserve would boost prices

Recently, the crypto market has yet to live up to expectations under the Trump Administration despite investors’ hopes for regulatory reforms, the Bitcoin Strategic Reserve, and the impact of Trump’s new policies on crypto prices.

Instead, Bitcoin’s price has fallen from over $100,000 at the start of the year to the mid-$80,000s for most of March.

With the markets bracing up for Trump’s reciprocal tariffs, to be announced on Tuesday at 4 p.m. ET, it remains uncertain how BTC will react in the long run.

President Trump is gearing up to drop a major announcement, dubbed “Liberation Day,” on Tuesday at 4 p.m. ET. The announcement will focus on unveiling reciprocal tariffs targeting 15 countries, including China, Canada, and Mexico, which have already imposed tariffs on the U.S.

However, the announcement is likely to be the subject of speculation and rumors.

As the world’s largest economy faces an onslaught of tariffs from its trading partners, President Trump is preparing to retaliate with a broad-ranging tariff program of his own.

The move is set to affect 15 countries that have already placed tariffs on U.S. goods, in an effort to exert pressure on these nations to open up their markets and reduce the trade deficit with the U.S.

Among the countries targeted by Trump’s tariffs are Canada, Mexico, China, India, Brazil, Turkey, Spain, France, Germany, Italy, Japan, Korea, Taiwan, Thailand, and Vietnam.

These tariffs are expected to be imposed on a wide range of goods, including food, clothing, machinery, and electronics. The tariffs could have a significant impact on both consumers and businesses in the U.S. and abroad.

Tariff War Shakes Up the Market

The ongoing tariff war is shaking up the stock market, with the S&P 500 dropping over 2% in the past five days. Bitcoin’s price often follows the market, so it could face more ups and downs. The trade war is likely to cause more short-term price swings.

Crypto prices have taken a hit as they’ve become more tied to traditional assets like stocks and bonds, which are struggling due to economic uncertainty. U.S. tariffs on imports have left Wall Street worried about a global recession, making investors wary of risky assets like crypto.

Marc Ostwald, Chief Economist at ADM Investor Services International, explained that “Markets are losing their ‘risk appetite,’ which is pushing crypto further from safe-haven assets like gold, which remains the go-to choice in uncertain times.”

As the global financial and trade system grows more fragmented, investors are increasingly seeking safer alternatives to riskier assets, and also place the U.S. dollar in a less favorable position.

Right now, gold is the preferred choice, having already gained 18% in the year to date. But this could change, according to Omid Malekan, adjunct professor at Columbia Business School, who believes that Bitcoin might soon take over as the ‘new gold’.

“The future is uncertain as both crypto and tariffs are new and complex. Some might say that crypto is a risky tech asset, so its price would fall due to tariffs. But Bitcoin is also seen as ‘digital gold,’ and gold prices are rising with the tariff news. I personally believe that when the economy is uncertain, investors might turn more to Bitcoin, just like they’ve turned to gold recently.”

Tariffs Could Boost Bitcoin

In another positive note, Zach Pandl, head of research at Grayscale, feels that the impact of tariffs on crypto could be “priced in” and the worst might be over already.

Besides, he believes that the Liberation Day announcement could help ease the financial market struggles and if the tariffs are kept tough but phased, targeting 15 countries, the markets will likely rally.

Pandl added that events like Circle’s IPO wouldn’t be happening if institutions weren’t getting more comfortable with the crypto space and its regulations. He believes that the tariffs will reduce the demand for the U.S. dollar and open the door for other currencies like Bitcoin.

Pandl still believes that Bitcoin will reach a new all-time high this year, despite the current negative sentiment around its price due to the market downturn.

Bounce-back For Bitcoin?

While crypto traders are used to rapid price swings, even the most experienced traders were surprised by Bitcoin’s recent price drop.

After reaching an all-time high of $103,000 in early January, Bitcoin has encountered significant headwinds.

As the S&P 500 slides further into a bear market and the U.S. prepares for another round of tariffs, traders are bracing for more volatility in crypto markets.

But despite the gloomy outlook and pessimistic outlooks from some analysts, traders are still hopeful that Trump’s