The cryptocurrency market experienced a significant downturn on Friday following President Donald Trump’s announcement of new tariffs, which sent shockwaves through global financial markets. Bitcoin fell by up to 6%, briefly reaching $82,000, while the broader cryptocurrency market declined by around 3% due to growing concerns of a global economic slowdown. This decline was triggered after Trump declared April 2 as “Liberation Day” and unveiled a comprehensive 10% baseline tariff on all US imports, with higher tariffs on several major trading partners.
Global equities also suffered, with US stocks reflecting losses seen in Asia and Europe. The S&P 500 fell back into correction territory, losing nearly $2 trillion in value, marking its worst single-day drop since September 2022. Deutsche Bank warned that these tariffs could reduce US GDP by 1% to 1.5% this year. The crypto markets were not immune, with Ethereum, XRP, and Solana experiencing losses, and the ETH/BTC ratio hitting its lowest point since June 2020 before a slight recovery.
Ultra’s CEO, Gus van Rijckevorsel, suggested that the repercussions of Trump’s strategy might continue throughout Q2 and potentially into the summer, with the expectation that Trump will eventually return to negotiations.
Traders are now assessing the potential effects of the tariffs on trade, interest rates, and investors’ risk appetite. Maksym Sakharov, co-founder at WeFi, noted that the business impact might be limited for now but cautioned that inflation could hinder the Federal Reserve’s ability to cut interest rates. Meanwhile, Washington’s upcoming budget debate adds to market anxiety, with the Treasury currently using “extraordinary measures” to meet its obligations. Analysts warn of a possible US funding crisis if a debt ceiling agreement isn’t reached soon.
Ruslan Lienkha, Chief of Markets at YouHodler, stated, “Given the negative outlook in stock markets, we anticipate that selling pressure may also extend to cryptocurrencies, though we do not expect a dramatic selloff in the short term.”
Twitter: 📉 Following Trump’s tariff announcements, the S&P 500 experienced a significant drop, and the crypto market wasn’t spared. Traders now grapple with the potential impact on trade and interest rates, amidst inflation and budget concerns. #Crypto #Tariffs #MarketUpdate
