Bitcoin Rallies 3.44% Amid Trump's Tariff Uncertainty
3min read Bitcoin (BTC) price is currently trading in the green as the broader financial landscape prepares for the implementation of President Donald Trump’s reciprocal tariffs. Despite the current rally, the long-term reaction of the BTC price to these tariffs remains uncertain. Bitcoin is known to exhibit short-term reversals to macroeconomic uncertainties, a trend that many believe may play out again.
Ask Aime: How will the current rally in Bitcoin prices be impacted by President Trump's reciprocal tariffs?
One of the most crucial policies in the Donald Trump administration is levying tariffs on key trade partners. While this move is considered a commensurate measure to match what other trade partners are levying on US goods, the aftermath has toppled the market. Almost all big economies, including Russia, have received tariff threats from the US government. This threat is bound to be matched by the countries involved, including Canada, Mexico, China, and the European Union. With Trump’s tariff kickstarting on April 2, Mexican President Claudia Sheinbaum has revealed that reciprocal measures will be announced on April 3.
This tariff war is poised to offset the mainstream stock market. The signs are already visible in the S&P 500, which has dropped by over 2% in the past five trading days. Similar negative sentiment is seen for the Nasdaq Composite and the Dow Jones. The correlation between Bitcoin price and the mainstream financial market remains a fueling factor behind potential negative shifts in the market moving forward.
As of the latest data, the price of Bitcoin has rallied 3.44% in 24 hours to $85,186.47. However, the coin’s price has experienced a unique drawdown over the past week, dropping 2.79%. Since President Trump took office, the price of Bitcoin has experienced a mix of positive and negative sentiments. Amid the positive shifts, the BTC price hit $109,114 ATH on January 20, corresponding with President Trump’s inauguration. Since the all-time high milestone, Bitcoin price has fallen by over 20% to date. With the trade wars forming a headwind for the coin, more volatility is expected in the short term.
With the trade war and reciprocal tariffs, inflation will soar again, forcing the Federal Reserve to adjust its interest rate policy. Should rates be slashed to boost the monetary landscape, it can set a basis for more BTC adoption, leading to a price surge in the long term.
While April started positively for the top coin, the month still holds uncertainties per the trade war. However, some important tailwinds are at play that may influence market valuation moving forward. The US government’s strategic Bitcoin reserve might serve as a basis for more nation-state adoption in the long term. Institutional investors are also betting on BTC, creating a high demand for the coin. Despite the current volatility, top advocates advise buying now with hopes of a rebound soon.
The crypto market is bracing for potential volatility as U.S. President Donald Trump prepares to announce reciprocal tariffs on April 2, a date he has dubbed "Liberation Day." The anticipation of these tariffs has already sparked a mix of reactions among investors, with some viewing the situation as a potential buying opportunity while others remain cautious. Bitcoin, the world's largest cryptocurrency, has been trading above $83,000, showing a slight increase of 1.8% in the past 24 hours leading up to Monday night. This comes after a period of decline over the past four consecutive days. Other major cryptocurrencies, such as Ether, XRP, and Solana, have also seen minor gains, though not significantly.
The market's current sentiment is one of uncertainty, with investors adopting a "wait-and-see" approach until the details of the tariffs are disclosed. Analysts suggest that the impact of the tariffs could be less severe than initially feared, but the market's next move will largely depend on the specifics of the announcement. Trump's tariff policies have historically caused significant price corrections in the crypto market. The recent downturn in the first quarter of 2025, which saw Bitcoin's worst performance since 2018, can be attributed to the implementation of substantial tariffs on goods from major trade partners. This correction went against investor expectations that the Trump administration's pro-crypto policies would extend the bull cycle.
The global economic uncertainty and the Federal Reserve's stance on interest rates have also contributed to the risk-off sentiment in the market. However, analysts remain optimistic about a potential recovery in the second quarter, with the Federal Reserve expected to cut rates and Trump's team delivering more concrete pro-crypto policies. The upcoming tariff announcement is a significant event that could inject further volatility into the already dynamic crypto market. If the tariffs are aggressive, Bitcoin and other coins may experience a dip as panic spreads. Conversely, if the tariffs are perceived as less severe, the market could see a rally. The exact impact will depend on the details of the announcement and the market's reaction to it.
