Bitcoin and crypto prices have dropped back as inflation fears and U.S. president Donald Trump’s tariff threats

Bitcoin and crypto prices have dropped back as inflation fears and U.S. president Donald Trump’s tariff threats

The price of bitcoin (BTC) fell on Tuesday as U.S. president Donald Trump’s tariff threats and fresh fears over a mystery hack continued to weigh.

Bitcoin fell 2.5% over the past 24 hours to trade around $80,000 per bitcoin by 04:08 ET (08:08 GMT). The world’s largest cryptocurrency had risen toward $90,000 earlier in the week.

The latest price movements come after the confirmation of a long-awaited bitcoin game-changer—a move that could have huge implications for the price of bitcoin and the crypto market.

The world’s largest cryptocurrency has also now been found to be massively outperforming Elon Musk’s Tesla (NASDAQ:TSLA), while legendary crypto trader Arthur Hayes has predicted the Federal Reserve will trigger a bitcoin price boom in April.

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Federal Reserve chair Jerome Powell could be about to triggering bitcoin price and crypto market mayhem.

“There was a seminal change in the [Federal Reserve chair Jerome Powell’s] tone at the last Fed board meeting,” Hayes, the cofounder of crypto derivatives pioneer BitMex who went onto launch the Maelstrom investment company, told podcaster Kyle Chasse.

Hayes, who’s this week been granted a pardon along with his fellow BitMex founders Benjamin Delo and Samuel Reed for Bank Secrecy Act violations by U.S. president Donald Trump, believes the Fed is "teasing" a return to “stealth” money printing known as quantitative easing even as it’s grappling with the $36 trillion U.S. debt pile that’s spiraled out of control since 2020.

Hayes pointed to comments made by Powell at the latest Fed press conference that “inflationary aspects of tariffs are transitory."

“Tariffs don’t matter any more to Powell, and they shouldn’t matter as crypto investors,” said Hayes. “If Trump does 50% or he does 2%, it doesn’t matter, because we know that Powell is going to continue to provide the easy monetary conditions that we need to have our portfolios go up in fiat dollars.”

Trump’s latest tariffs, which have roiled the bitcoin price, crypto and stock markets, are set to hit goods from Canada, Mexico and China from April 2.

The move, which Trump said would be in retaliation for "unfair" trade practices by other nations, has seen markets grow increasingly nervous over the potential for a wider trade war to unfold.

However, in a surprising turn of events, Trump recently hinted at softening the blow, suggesting "flexibility" on his part to modify the tariffs.

This shift in tone could spell good news for bitcoin, according to 10x Research founder Markus Thielen, who has predicted a combination of Trump’s softening of tariffs and an increasingly dovish Fed is setting bitcoin up for a recovery.

The bitcoin price has rocketed higher in recent years, with a Federal Reserve flip predicted to push the bitcoin price to new highs.

“Bitcoin is attempting to form a bottom, supported by Trump’s recent shift toward ‘flexibility’ on the upcoming April 2 reciprocal tariffs, softening his earlier rhetoric,” Thielen wrote in an emailed note.

The Trump administration has imposed tariffs of 50% on a range of goods, including fruit, maple syrup and seafood, in response to tariffs imposed by Canada, Mexico and China.

The tariffs are set to come into effect on April 2, but Trump said he may be willing to adjust the rates if the other countries make changes to their own tariffs.

"We are not interested in tariffs, but we are interested in fair trade," Trump said in a statement. "If our trading partners want to avoid tariffs, they can simply adjust their own trade policies to be fairer to the United States."

The administration is also keeping an eye on the Fed, with potential future easing on the horizon.

“The Fed chair also signaled that it would ‘look past short-term inflationary pressures, laying the groundwork for potential future easing,” Thielen added.

“The close reading of the minutes and statement suggests that the Fed is aware of the buildup in inflationary pressures, but it is ultimately not concerned about them in the context of the broader economic recovery.”

The upbeat assessment of the world's largest economy and signals that it would tolerate somewhat higher inflation to ensure a complete recovery from the pandemic recession were the main takeaways from the meeting.

“Powell’s mildly dovish tone suggests that the Fed’s put remains intact, providing further support for a recovery in stock prices."