Bitcoin Market Takes a Beating as Trump's Tariffs Send World Stock Markets into a Tailspin

Bitcoin plummeted to as low as $91.2K as all of crypto has dipped with world stock markets starting the week with heavy bleeding.

President Donald Trump announced new tariffs on Mexico, Canada, and China, on Friday, which caused global markets to plummet over the past weekend. The fallout is still being felt today, as stocks are still plunging, Bitcoin, Gold, and Silver are all sliding downwards, and investors are scrambling to make sense of what’s next.

As the US markets opened on Monday, Wall Street was seemingly still feeling the impact, with the Dow Futures dropping 1.5% to 44,029, the Nasdaq falling 1.9% to 21,173, and the S&P 500 sliding 1.71% to 5,963, per data from CNBC.

The early Asian market trading hours today also saw Gold and Silver fall by 1.34% and 0.7%, respectively, before briefly recovering during the noon hours. Bitcoin, which had been trading comfortably above $100,000, dropped more than 4% in the past 24 hours, sinking to $94,500.

Other cryptocurrencies fared even worse. Only three coins in the top 50 market cap rankings, DEXE, HYPE, and OM, started the week trading in the green, per CoinGecko’s recent updates. The global crypto market cap is down over 7% in the last day, with Coinglass revealing liquidations have exceeded $2 billion within the same period.

Investors seem to be pricing in fears of economic retaliation from America’s biggest trading partners, Mexico, Canada, and China. It’s not looking good for crypto, stocks, and gold, for now.

The price of Trump tariffs

President Trump lived up to his campaign’s promises, and imposed a 25% tariffs on Mexican and Canadian imports, along with a 10% levy on Chinese goods. Markets did not receive the news with much enthusiasm, and so the weekend of financial bloodbath began.

Economists are blaming the effect on Donald Trump, some industry analysts believe it’s just “a tidal wave of fear, uncertainty, and doubt.”

😰 Bitcoin plummeted to as low as $91.2K as all of crypto has dipped with world stock markets starting the week with heavy bleeding. Media outlets seem to be attributing plummeting sectors to 'Trump's trade war'.Whether this is the primary reason or if there are other… pic.twitter.com/ij1bQ6xfUu

With Mexico and Canada being two of the biggest suppliers of silver and gold to the US, tariffs should, in theory, drive prices of commodities up and drown the US stock market down, together with assets like Bitcoin and Gold.

Banks will scramble to cover debts, and they often offset the bills by offloading assets, including gold and silver ETFs, which causes temporary price dips before the long-term supply shock kicks in.

What about crypto? Well, FUD is arguably stronger for digital currencies than in any other market. And this is why investors are moving to sell their holdings, to avoid “giving back” the profits they gained last December and part of January 2025.

But Bitcoin supporters, like Rich Dad Poor Dad author Robert Kiyosaki, say this is the perfect time to buy.

“Gold, silver, Bitcoin may crash. GOOD. Will buy more after prices crash,” Kiyosaki said in an X post on Friday, after President Trump announced trade tariffs on America’s trading partners. “Real problem is DEBT….which will only get worse. CRASHES mean assets are on sale. Time to get richer.”

Is Bitcoin wiped by the dark clouds of trade wars?

The US Federal Reserve commissioners, led by chair Jerome Powell, believe President Trump’s tariffs could cause inflation to grow. In a press briefing on January 29, Powell said that the inflation rate drop stagnated at around 2.5%, a little over their target of 2%, and didn’t seem to be going down at a rate that warrants interest rate cuts.

However, economists pinned the Fed’s pause on interest rate cuts last Wednesday on the fear of what Trump’s tariffs would do to the economy if put in effect.

Paul Ashworth, chief North America economist at Capital Economics, warned in a written note that if Trump moves forward with tariffs sooner than expected, “inflation could rise even faster” than current forecasts suggest.

Bitcoin has long been viewed as a hedge against inflation and government policy missteps. However, in the face of a potential trade war, it has not been immune to the broader financial markets selloff.

Speaking to Reuters, Chris Weston, head of research at Pepperstone, noted that crypto tends to act as a risk proxy during global uncertainty, meaning that when investors get nervous, they sell off digital assets along with traditional ones, which causes the price to spiral down.

Is it an effect that will