Fear about the fallout from Trumps tariff hits the broader crypto market, dropping the Bitcoin price to $ 77 K. With a five-year high index with Wall Street’s fear level, industry experts express worry about the global economic growth.
Amid Trump’s reciprocal tariffs on major US trading partners, which came into effect on April 5, shook the entire financial market. The price of Bitcoin, which hit a $100 million milestone at the end of 2024, now faces a major dip, reaching $ 77 K. Trumps tariff targets more than 25 countries, with a new baseline 10% US tariff on goods from all countries and a higher reciprocal tariffs on countries that have high barriers for US imports.
The tariff regimes and their potential impact have created tension in financial markets, and speculative assets like cryptocurrencies tend to underperform amid the changes. With the recent dip in Bitcoin’s price, the largest cryptocurrency wiped out around 40% of its all-time high during Trump’s inauguration in January.
Alongside the tariff fears, the chances of a US recession also undermined the Bitcoin prices. The Goldman Sachs, the leading investment banking company in the US, predicted the country’s probability of witnessing a recession ranging from 20% to 35% in the next 12 months. The company cited uncertainty in Trumps tariffs, sticky inflation, and declining consumer and business sentiment in the country as contributing factors to the increased chances of recession.
Not Only Bitcoin, The Entire Crypto Market Bleeds
Though Bitcoin is the most affected crypto by the uncertain tariff plans, the entire crypto market has witnessed its impact. The second-largest crypto, Ether, currently trading at $1544, has noticed a 19% down over the past 10 days, hitting a 16-month low.
XRP, which has made significant gains after its inclusion in Trump’s Bitcoin reserve, wiped out those gains and is down 6.34%, now trading at $1.80. Solana, trading at $101.72, is down 15.28%, while Cardano witnesses a 3.67% decline, currently trading at $0.55.
Apart from altcoins, meme coins also faced a major drop in price. $TRUMP, launched by American President Donald Trump after his election victory, is now trading at $7.75, an 89.74% drop from its all-time high in January 2025. Dogecoin, the largest meme coin, also dropped, the coin fell 4.67% and is currently trading at $0.14.
Trumps Reciprocal Tariff Creates High Volatility
With the implementation of the new reciprocal tariff system, Trump has smashed the 75-year-old global trading system, bringing a new range of tariffs for goods and services. With the new standards on tariffs, the entire financial market is under pressure, creating a new level of volatility that the world has never witnessed before.
The US Treasury yield has seen a major drop amid the tariff policies, the US 10-year Treasury has fallen to 3.86%, the lowest in the last six-month timeline. The Federal Reserve head Jerome Powell reveals that the impact of new tariffs is more than expected and is poised to create an economic fallout, bringing higher inflation and slower growth.
In addition, the US two-year swap spreads have witnessed the highest one-day contraction on Friday since the March 2023 regional bank crisis. The US two-year swap spread is the measure of the difference between two-year swap rates and two-year Treasury yields.
What Is Trumps Tariff Plan?
Trumps tariff plans create a barrier to global trading. It involves a 10% tax on goods from every country and a higher tax for countries that impose high barriers to US imports. According to the data from the executive order, the European Union will be hit with a 20% US tariff rate, while 46% for Vietnam, 24% for Japan, 25% for South Korea, 26% for India, 32% for Taiwan, 36% for Thailand and 34% for China.
However, countries like Britain, Brazil, and Singapore, which had trade deficits with the US last year, only got a 10% baseline tax. Countries like Canada and Mexico are currently exempted from reciprocal tariffs since they already have Trump’s 25% fentanyl related duties on their goods.
With the existing market scenario mainly contributed by Trumps tariff plans, the global financial market, including crypto, is positioned to witness more fear, reducing the price of digital assets even further.