Bitcoin Succumbs to U.S Tariffs
Bitcoin has fallen 7.7% and looks likely to continue to do so as the introduction of U.S Tariffs come into effect this has also caused global financial markets to also decline and are being attributed to the U.S. President Donald Trump's tariff policies.
However,, the tariffs aren't all bad news as it has led to a strengthening of the U.S. dollar but has also caused a sharp decline in cryptocurrency values across the entire cryptosphere.
Gold which is traditionally viewed as a safe haven asset has seen it's value drop also leading many to believe that the high cost of living crisis might be coming to an end.
U.S. Dollar Strengthens Amid Tariff Announcements
President Trump has announced a series of tariffs aimed at major U.S. trading partners. On February 27, 2025 he confirmed a 25% tariff on imports from Canada and Mexico which are set to take effect on March 4. An additional 10% duty on Chinese imports was also declared as he continues to raise concerns over illegal drug flows into the United States.
The announcements have been back and forth one day he is doing it, then there are exemptions then there isn't.
Sounds confusing right? well what if we told you maybe, just maybe Trump won't do it at all but the threat of doing it is just as good to bring down cost of living preasures and increase USD value then actually doing it.
The constant uncertain messaging have created uncertainty in global trade market which prompts investors to seek the relative safety of the U.S. dollar. The dollar has risen to a two-week high following the announcements.
It is largely due to the perception of the dollar as a safe haven currency during times of geopolitical and economic instability. As tariffs threaten to disrupt international trade this causes investors to anticipate potential slowdowns in global economic growth and leads them to buy into the stability of the U.S. dollar.
Not a bad play eh?
Bitcoin Decline
While the USD is rising the cryptocurrency market has faced a substantial selloff. with Bitcoin the leading digital asset experiencing a sharp decline falling below the USD 80,000 mark for the first time since November 2024 . This downturn represents a significant retreat from its all time high of over USD 109,000 in January 2025.
The recent declarartion of tariffs has led to a broader risk off sentiment among investors which is causing them to pull back from riskier assets across the all cryptocurrencies. Additionally, the anticipated pro crypto regulatory environment under the Trump administration has not happened as expected leading to quite a lot of market disappointment.
So as we can see, Trump is either screwing with the market to make it uncertain to bring down inflation and increase the USD value, or he's actually going to do it which will then see markets stabilize, but let's hold off on actually making a call on it.
Trump is to unpredictable which is why people are cautious that he will do it.
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