Tariffs and Russia-Ukraine
The Impact of Tariffs on the Crypto World:
Tariffs, as part of international trade policies, impose additional taxes on the trade of goods and services between countries. This can heighten global economic uncertainty and affect financial markets, particularly the highly volatile cryptocurrency market. On April 3, 2025, following the announcement of new customs tariffs by the U.S., noticeable turbulence was observed in the crypto market. The total market capitalization dropped from $2.8 trillion to $2.6 trillion, with many altcoin projects losing nearly 10% of their value.
Such economic policies typically create pressure on risky assets. Although cryptocurrencies are often seen as an alternative to traditional financial systems, during periods of global economic uncertainty, investors tend to gravitate toward safer havens. When tariffs create tensions with major trading partners, they can impact crypto demand in those regions. For instance, if local currencies depreciate due to tariffs, people might turn to cryptocurrencies like Bitcoin as a hedge against inflation. However, in the short term, uncertainty often leads to increased selling pressure, resulting in price declines.
In the long term, the effects of tariffs can be more complex. If tariffs erode trust in traditional financial systems, cryptocurrencies might be perceived as a "safe haven." Some analysts suggest that tariffs could support Bitcoin in the long run by increasing crypto demand amid economic uncertainty. However, this perspective depends on overall market sentiment and how tariffs are implemented. Current data indicates that volatility has risen in the short term, with the market reacting to this new economic policy.
The Crypto Bull Market Starting After the Russia-Ukraine Issue Is Resolved:
The Russia-Ukraine war and the subsequent Western sanctions on Russia have been significant factors affecting the cryptocurrency market for a long time. Russia has turned to cryptocurrencies for international payments to circumvent sanctions. However, this process has been slowed by the impact of sanctions, and the crypto markets have also been affected by this uncertainty.
The resolution of the Russia issue—meaning the end of the war and the easing of sanctions—could boost risk appetite in global markets. The cryptocurrency market, often categorized as a risky asset class, tends to see bull markets during periods of global economic stability. If tensions between Russia and the West decrease and sanctions are lifted, several key dynamics could trigger a crypto bull market:
1. Increased Use of Crypto in International Trade: Russia has started using cryptocurrencies as a tool for international payments due to sanctions. If this infrastructure persists after the issue is resolved, assets like stablecoins and Bitcoin could see greater adoption in global trade. A global stablecoin supply reaching $1 trillion could trigger significant growth in the crypto market. Russia’s increased use of crypto during this period could drive demand, supporting a bull market.
2. Improved Market Sentiment: The war and sanctions have created fear and uncertainty in global markets. During such periods, investor sentiment often leans toward "extreme fear." However, this can also present buying opportunities. Resolving the Russia issue could shift market sentiment toward "optimism" and "greed," encouraging new investors to enter the market and potentially sparking a bull market.
3. Return of Institutional Investments: It is predicted that institutional investors will bring new liquidity to the crypto market in 2025. The resolution of the Russia issue could enhance global economic stability, enabling banks and large institutions to accelerate their crypto investments. This could serve as a catalyst, particularly for high-market-cap cryptocurrencies like Bitcoin and Ethereum.
4. Convergence with the Bitcoin Halving Effect: Following the Bitcoin halving in April 2024, the market is expected to start growing by the end of 2024 and reach all-time highs in 2025. If the Russia issue is resolved in 2025, this could align with the halving cycle, further strengthening the bull market. The halving reduces Bitcoin’s supply, creating upward price pressure, and when combined with global stability, it could trigger a significant rally.
In conclusion, the resolution of the Russia issue could serve as a powerful catalyst for a bull run in the crypto market. However, this process depends not only on geopolitical developments but also on factors like market sentiment, institutional investments, and technological adoption. While current economic uncertainties and tariff-induced volatility may pressure the market in the short term, the establishment of global stability in the long term could usher in a new period of growth for cryptocurrencies.
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