Trump’s Liberation Day: The impact of tariffs on the crypto market

Trump’s Liberation Day: The impact of tariffs on the crypto market

Apr 4, 2025
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On April 2, the declared "Liberation Day," markets were rocked by a major policy announcement from President Donald Trump, who revealed a sweeping new tariff plan: a baseline 10% tariff on imports from over 50 countries, potentially rising to 50% to mirror foreign rates on U.S. goods. The policy begins April 5, with full reciprocation by April 9. 

Odds of a rate cut in June have increased to 67% on the CME Watch Tool. However, Federal Reserve Chair Jerome Powell expects Trump’s tariffs to raise inflation and lower growth, as he reiterated to journalists on April 4. Powell indicated the Fed won’t move on interest rates until the full impact becomes clearer. 

While more aggressive than expected, the announcement offered clarity that markets often prefer, opening a window for strategic investment.

Notably, Bitcoin is now back in the $82K-$85K range that it traded within for much of March, before breaking below it last week. As long as Bitcoin holds above the key $82K support level with conviction - and the S&P 500 remains above the critical $5,500 threshold - we’re unlikely to see Bitcoin push to lower lows in the near term.

Yet despite the broader risk-off sentiment, crypto markets showed remarkable resilience compared to equities. Bitcoin held above the key support level of $82K, a sign of strong underlying demand. Much of the market uncertainty surrounding Liberation Day has been priced in, when Bitcoin briefly dipped to $81K before recovering above that critical $82K threshold. 

As the only asset class that trades 24/7/365, crypto often acts as the first outlet for investor sentiment during periods of uncertainty, especially when traditional markets are closed. In such moments, Bitcoin tends to be the first sleeve of a portfolio to be sold, given its deep liquidity and its association with higher-risk assets, much like tech stocks or venture capital allocations. 

Looking ahead, global reactions will be critical. Key trading partners—including Mexico, China, South Korea, and Japan—may soon unveil countermeasures, potentially shaping the next chapter in this unfolding economic story.

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