Bitcoin price falls as Trump’s tariffs alarm markets

The recent announcement of sweeping tariffs by US President Donald Trump has sent shockwaves across global markets, impacting various assets including Bitcoin. Bitcoin experienced significant volatility, surging above $87,000 before dropping 5%, and is currently trading around $83,500, erasing previous gains. This market turbulence led to over $180 million in liquidations in both bullish and bearish Bitcoin bets, with Ethereum futures also experiencing a significant amount of liquidation, primarily in long positions.

The impact of Trump’s tariffs was felt globally, with stock markets around the world taking a hit. Japan’s Nikkei 225 dropped by 3%, Hong Kong’s Hang Seng index fell by 1.5%, and US stock futures indicated steep losses, with the Dow, S&P 500, and Nasdaq futures all showing declines ahead of the market open. London’s FTSE index also saw a 1.1% decrease in early trading, with mining companies and banks among the hardest hit.

Trump’s tariff policy includes a 25% levy on auto imports and a minimum 10% tariff on all foreign exports to the US. Major trading partners like China and the European Union are facing additional duties, with some Chinese goods subject to a 50% tariff increase and Indian exports seeing a 26% hike. Trump defended these measures as crucial steps towards achieving economic independence, stating that it marked the beginning of “Make America Wealthy Again.”

The uncertainty surrounding Trump’s tariffs initially led to a sell-off in risk assets, impacting both Bitcoin and equities. However, some analysts see a potential opportunity for a rebound in Bitcoin prices. Despite short-term volatility, decreasing uncertainty and a return of institutional buying pressure may pave the way for another attempt at reaching $90,000 in the near future.

The broader market reaction to Trump’s tariffs reflects deep concerns about the economic consequences. While safe-haven assets like gold surged to unprecedented levels as investors sought security amidst the turmoil, cryptocurrencies and equities faced significant headwinds. Spot gold prices surpassed $3,150 per ounce for the first time, reflecting the flight to safety amid market uncertainties.

Overall, Trump’s tariffs have sent shockwaves through the global economy, impacting various assets and markets. The ongoing volatility in Bitcoin prices, as well as the broader market reactions, underscore the deep concerns surrounding the potential economic fallout from these tariff measures. Investors continue to closely monitor developments to assess the long-term implications of these policies on inflation and consumer prices in the UK and beyond.