Bitcoin declined to around $81,000, posting a 5% decline, following President Donald Trump’s sweeping tariffs shook global markets. Other leading cryptocurrencies suffered losses as well, with Ether losing 6% and the token against Solana losing 11%. Meanwhile, conventional equities took a beating: the general S&P 500 posted its biggest one-day drop in years, highlighting how much the tariff announcement shook investor confidence.
Market analysts cite the just-announced tariff rates—at least 10% on some products and possibly more on others—as a primary driver that rushed the sell-off. By fueling growing concerns over a global trade war, these events cast uncertainty over financial markets. Assets tied to the crypto universe were not exempt; Coinbase shares dropped about 7%, while MicroStrategy declined by 10%, mirroring investors’ concerns about the wider economic implications.
When analyzing Bitcoin’s trends, some experts point out the influence of macroeconomic factors. DYOR CEO Ben Kurland postulates Bitcoin has been behaving like a high-beta macro asset, trending significantly along with risk-taking activity. According to Kurland, “Bitcoin trades at the intersection of narrative, liquidity, and leverage.” Currently, it’s more about following real yields, rate expectations, and dollar strength.”
He refers to how when real rates fall and the dollar loses strength, Bitcoin tends to experience an increase; in this case, though, the new shock of uncertainty from tariffs dominated any positive action, resulting in a rapid decline in price.
In spite of this volatility, Bitcoin has been resilient in the last month, fluctuating largely between $80,000 and $90,000. Most investors, including institutional investors, continue to wait for a particular catalyst specific to crypto that will either drive prices up or drive them lower. In the absence of such a catalyst, some market participants think that Bitcoin’s direction will still follow the overall risk appetite in the equities and bond markets.
David Hernandez, a crypto investment expert at 21Shares, states that investor demand may revive as certainty surpasses speculation. “While tariff rates were a bit more than expected, the announcement brought much-needed clarity around the scope of the policy,” Hernandez says. He is convinced that markets feed on certainty, and with one of the primary sources of speculation being revealed, institutional investors may see an opportunity to take advantage of diminished crypto values. The takeaway in this view is that although the tariffs caused a general sell-off, the market will stabilize or even rebound if investors view it as a time for discounted entry.
Nevertheless, near-term prospects continue to be clouded. There is a danger of retaliatory tariffs from prominent U.S. trading partners pending, which would further inject volatility into the market. Supply chains globally would come under threat as major economies widen the war, which could limit overall economic expansion. For cryptocurrencies, increased uncertainty makes it more difficult for them to walk the path of increased mainstream recognition and acceptance as a hedge on conventional market variability.
Consequently, the world of crypto remains in an uncomfortable limbo, suspended between the recent price loss and a desire that lower prices will attract long-term investors. Whether or not Bitcoin can recapture its momentum and escape its month-long range depends on how soon global trade tensions relax, as well as the extent to which macroeconomic indicators and central bank policies change.
For the moment, market observers continue to pay close attention to both geopolitical events and the health of underlying demand for cryptocurrencies, pinning their hopes on these signals to reveal the direction of digital assets.
