Bitcoin Plummets 29% Amid Trump's Tariff Turmoil
3min read Since the inauguration of US President Donald Trump on January 20, Bitcoin (BTC) has experienced significant volatility, swinging from a record high of $109,000 to below $78,000. This fluctuation was largely driven by major tariff announcements from the US and retaliatory measures from trade partners, which eroded the value of the cryptocurrency market and unsettled global markets.
Ask Aime: What's behind Bitcoin's wild price swings post-Trump inauguration?
Market sentiment was particularly affected by the back-and-forth nature of Trump's tariff policies. At times, his approach was tough, while at other times, it was more accommodating. This inconsistency left markets in a state of limbo, with few investors willing to take decisive bullish positions but also reluctant to sell their assets for fear of missing out on the next rally.
Ask Aime: How will the global market respond to US trade policies?
By mid-March, there were signs of investor confidence returning as the White House adopted a more measured approach to tariffs. However, mixed signals continued to persist, and with a second wave of "reciprocal tariffs" looming on April 2, market jitters had not fully subsided.
Bitcoin's value hovered above $100,000 until January 26, when Trump threatened 25% tariffs on all Colombian imports following a dispute with Colombian President Gustavo petro over the acceptance of US military aircraft carrying deported migrants. Petro retaliated with his own tariffs, but Colombia quickly reversed its stance under pressure from US trade dependencies. Bitcoin reclaimed $100,000 shortly after, but market sentiment was further shaken by the sudden rise of Chinese AI firm DeepSeek, whose budget-built model sparked fears of disruption in the tech sector and contributed to a risk-off sentiment across markets.
On February 1, Trump signed an executive order imposing 10% tariffs on all Chinese imports and 25% on Canadian and Mexican goods, citing a national emergency over immigration and fentanyl. China, Canada, and Mexico all threatened retaliation. Bitcoin tumbled below $93,000 but rebounded after Trump agreed to a 30-day pause on the Canada and Mexico tariffs on February 3. However, the Chinese tariffs took effect as scheduled on February 4, marking the last time Bitcoin traded above $100,000.
Bitcoin remained volatile through mid-February. On February 10, Trump announced the removal of steel and aluminum tariff exemptions, raising all metal tariffs to 25%, effective March 12. He then unveiled a "reciprocal tariffs" plan to match foreign import taxes. Bitcoin held steady around $93,000 and briefly rallied to $99,000. However, on February 21, the momentum collapsed following the Bybit hack, the largest crypto breach in history, sending Bitcoin back below $90,000.
On February 25, Trump added to bearish pressure by ordering a review of potential tariffs on imported copper, citing national security. Bitcoin dipped below $80,000 for the first time since November.
March began with Trump issuing another order reviewing tariffs on lumber and timber. Crypto briefly rallied after the White House unveiled plans for a Strategic Bitcoin Reserve and digital asset stockpile, including XRP, SOL, and ADA. On March 4, Trump followed through with 25% tariffs on Canada and Mexico, and doubled Chinese tariffs to 20%. All three countries vowed to retaliate. The next day, Trump granted a one-month exemption on tariffs for US automakers importing from Canada and Mexico. A day later, the White House extended the tariff pause on many imports that qualify under the USMCA, while still threatening reciprocal tariffs on April 2.
Trump credited Mexican President Claudia Sheinbaum for "unprecedented" border cooperation. Canada also signaled easing tensions. Bitcoin see-sawed on the $90,000 mark but eventually dipped below on March 7, and it has not reclaimed that level at the time of writing. Meanwhile, Trump finalized the steel and aluminum hikes. Then on March 13, he threatened 200% tariffs on European wine, champagne, and spirits if the EU moved forward with a 50% tax on american whiskey as a retaliation against steel and aluminum tax.
By mid-March, the administration’s tone began to soften. On March 18, Treasury Secretary Scott Bessent said tariffs would be tailored to each country’s trade practices and could be avoided entirely if partners lowered their own barriers. Financial markets, rattled for weeks, began to recover. On March 24, Bitcoin rose to $88,474 on reports that Trump’s next round of tariffs would be more targeted than initially feared.
Investors were advised to continue monitoring traditional market developments, especially with Bitcoin’s rising correlation with traditional indexes. With April 2 approaching, crypto markets remained fragile, and investors braced for what "Liberation Day" might bring. Trump recently hinted that tariffs on automobiles, aluminum, and pharmaceuticals were under consideration.
In summary, the volatility in Bitcoin's value was directly influenced by the tariff policies implemented by the Trump administration. The back-and-forth nature of these policies created a state of uncertainty in the market, leading to significant fluctuations in Bitcoin's price. As the administration's tone softened by mid-March, there were signs of recovery, but the market remained fragile with the looming threat of further tariffs.
