- Bitcoin has fallen from more than $100,000 to approximately $85,000, with markets responding to economic uncertainty.
- Investors are turning to gold as tariffs and stock market volatility make crypto riskier.
- Trump’s April 2 announcement may affect Bitcoin, depending on the impact of tariffs on the U.S. dollar and global trade.
The cryptocurrency market has not fared as well as most hoped during the Trump presidency.
Trump’s tariffs had led investors to anticipate that regulatory changes and the Bitcoin Strategic Reserve would drive prices higher. But as an alternative, Bitcoin fell from more than $100,000 at the start of the year to about $85,000 in March.
The market now waits for President Trump’s announcement on April 2 at 4 p.m. ET, or “Liberation Day.” He will impose new tariffs on 15 nations, including China, Canada, and Mexico. They already have tariffs on U.S. products, and Trump’s action is viewed as a reaction.
The stock market has responded negatively to this, with the S&P 500 declining over 2% in the past five days. Bitcoin tends to track the stock market, so it may experience more volatility as well.
Investors Turn to Gold Over Crypto
The correlation between crypto and traditional assets such as stocks has become more prominent. Most investors fear that tariffs will decelerate the economy, which is why they avoid taking risks such as investing in Bitcoin.
Some analysts are of the opinion that the market is losing its risk appetite, shifting investors to gold rather than crypto. The prices of gold have increased by 18% this year due to individuals seeking safer havens to invest their money.
Yet, not all people expect Bitcoin to continue struggling. There are those who think that it can still be the “new gold” of the future. Both as a tech asset and as a store of value, Bitcoin is perceived.
Even if tariffs hurt speculative investments, gold prices have gone up due to similar economic fears. If Bitcoin begins to behave like gold, then it might even benefit from this uncertainty.
Market Awaits Trump’s April 2 Announcement
Others think the worst effect of the tariffs may already be priced into Bitcoin. If Trump’s April 2 announcement is not as severe as anticipated, markets may rebound, and Bitcoin could recover.
There is also increasing faith in crypto, as evidenced by significant events such as Circle’s IPO. Some analysts believe tariffs will soften the U.S. dollar, causing increased interest in Bitcoin.
Meanwhile, investors are waiting to see the market’s reaction. If tariffs strengthen the U.S. dollar or put the brakes on international trade, crypto may yet continue to slide.
However, if inflation increases and the Federal Reserve cuts interest rates, Bitcoin adoption may expand, paving the way for a price rise in the long term. Investors are waiting to see what will happen for now.
Also Read: U.K. Freezes $7.7M in Crypto: An End or Just the Beginning?
