Trump’s tariffs spark crypto market dip amid national emergency
The cryptocurrency market experienced a sharp downturn following U.S. President Donald Trump’s declaration of a national emergency and the imposition of sweeping tariffs on global imports.
Announced on April 2, the tariffs include a baseline 10% levy on all imports, with higher rates targeting specific countries, such as 34% for China, 20% for the European Union, and 24% for Japan.
The measures are set to take effect on April 5.
Bitcoin (CRYPTO:BTC), which had been rallying earlier in the day, dropped 2.6% from $88,500 to $82,876 after the announcement.
Ether (CRYPTO:ETH) saw a steeper decline of over 6%, falling from $1,934 to $1,797.
The total cryptocurrency market cap shed 5.3%, dipping to $2.7 trillion.
The Crypto Fear & Greed Index also reflected heightened anxiety, dropping to a score of 25, classified as "extreme fear."
The tariffs are part of Trump’s broader trade strategy aimed at addressing what he described as decades of unfair trade practices.
During his Rose Garden speech, Trump framed the move as a "declaration of American independence" from foreign economic exploitation.
However, the announcement has raised concerns about potential retaliatory measures from key trading partners like China and the EU, which could exacerbate global market volatility.
Rachael Lucas, a crypto analyst at BTC Markets, noted that initial optimism over tariff clarity gave way to panic selling as the full scope of the measures became clear.
Trading volumes surged by 46% on her platform as traders scrambled to reposition their assets.
“If China or the European Union hit back hard, expect another round of panic selling,” she warned.
Despite the immediate market impact, some analysts see potential long-term benefits.
David Hernandez from 21Shares suggested that while the tariffs introduced short-term volatility, they also provided clarity that could stabilise markets over time.
“Markets thrive on certainty,” he said, adding that institutional investors might view the current dip as an opportunity to enter at lower valuations.
As global responses unfold, including possible countermeasures from major economies like China and Japan, uncertainty looms over both traditional and digital markets.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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