Bitcoin (BTC) price breaks above $86,000 as Trump's next round of tariffs could be more measured

Bitcoin (BTC), the largest digital asset by market value, traded at around $86,500, up 2.7% on a 24-hour basis

The next round of Trump tariffs due on April 2 could be more measured than initially expected and focused on fewer products and countries, rendering the impact less impactful than anticipated, rendering the impact less impactful than anticipated, a report by Bloomberg said Monday.

Futures tied to the S&P 500, Dow Jones Industrial Average, and Nasdaq rose over 0.5% on the day, while Wall Street's fear gauge, the VIX index, slipped 2.5% to 18.88 points by 06:38 AM ET (10:38 GMT). Markets in China reversed early losses.

The Biden administration is preparing to impose new tariffs on April 2 on goods from China and other countries in response to a World Trade Organization ruling that China's trade practices are unfair, the report said, adding that the tariffs will be imposed in "reciprocal" fashion.

However, the administration is planning to impose the tariffs more narrowly than it has threatened at times, and some countries may be exempted, according to people familiar with the matter.

Trump's administration has threatened to impose tariffs on nearly all goods and services if needed to force other countries to open their markets to U.S. products and treat U.S. companies fairly.

The administration is also planning to impose the tariffs in a way that minimizes any impact on the U.S. economy, and it may not add to the existing tariffs on steel and other metals, which are already having a significant impact on prices and production, the report said.

Trump's tariffs roiled the market sentiment in February, sending both stocks and the crypto market lower. BTC fell nearly 17.6%, hitting lows under $80,000. Last week, the Federal Reserve revised its inflation forecasts higher while downgrading growth figures likely due to Trump's aggressive trade policies.

The Fed, however, called the tariffs-led inflationary impulse transitory while retaining forecasts for two rate cuts this year in a dovish move for risk assets, including cryptocurrencies.

The Fed action, coupled with prospects of easing tariffs, has revived bullish sentiment in the market.

"I bet $BTC hits $110k before it retests $76.5k. Y? The Fed is going from QT to QE for treasuries. And tariffs don’t matter cause “transitory inflation”. JAYPOW told me so," BitMEX co-founder Arthur Hayes, who is now chief investment co-founder said on X.

The other key factors to watch out for in the coming days are Friday's PCE reading, the Fed's preferred inflation gauge, and the appearance of the SEC nominee Paul Atkins and Comptroller of the Currency nominee Jonathan Gould before the Senate Banking Committee on March 27.