The impact of Trump's tariff policy on virtual currencies (cryptocurrencies) presents multi-dimensional, dynamic changes, mainly transmitted through the following mechanisms:
1. Short-term Direct Impact: Risk Asset Sell-off undefined
Market panic and risk aversion sentiment
Trump's tariff increases have escalated global trade frictions, heightened economic recession fears, and led investors to sell high-risk assets (including cryptocurrencies).
For example, in February 2025, after Trump announced tariffs on China, Mexico, and Canada, Bitcoin plummeted over 4% within 24 hours, hitting a low of $96,606, with the total market cap of cryptocurrencies evaporating by $200 billion in a single day.
In April 2025, the 'reciprocal tariff' policy led to the U.S. stock market losing over $50 trillion in market value in a single week, with Bitcoin falling simultaneously as investors sold off crypto assets due to liquidity crisis concerns.
Leverage liquidation chain reaction
Market volatility triggers high-leverage contract liquidations. After the tariff policy was implemented in February 2025, over 130,000 cryptocurrency investors globally were liquidated within 24 hours, resulting in hundreds of millions in losses.
2. Mid-term Structural Impact: The Dollar's Status and Policy Game undefined
Undermining dollar credibility, boosting demand for crypto asset alternatives
The tariff war combined with an expanding fiscal deficit undermines the international trust in the dollar. Some funds flow into cryptocurrencies seeking safe havens:
Economist Li Daokui points out that Trump's promotion of virtual currencies may pose a more serious threat to dollar hegemony than tariffs, as cryptocurrencies provide decentralized alternatives.
Stablecoins (like USDT) anchored to the dollar system direct their reserve funds to U.S. Treasury bonds, forming a 'new dollar cycle' that inflation triggered by tariffs may strengthen.
The Trump family's 'policy arbitrage' behavior
The Trump family is deeply involved in the cryptocurrency market, and policy changes may create profit opportunities for them:
Issuing personal token $TRUMP, its market cap once exceeded $80 billion, with prices fluctuating sharply during tariff policy volatility (e.g., single-day price swings exceeding $10).
The affiliated company World Liberty Financial (WLFI) sold Ethereum before and after the tariff policy was announced, triggering a market sell-off.
3. Long-term Potential Driving Force: Financial System Reconstruction undefined
The U.S. promotes a strategy for cryptocurrency compliance
The Trump administration incorporates cryptocurrencies into national strategy, attempting to consolidate financial dominance through regulatory relaxation:
Trump publicly claims that 'cryptocurrencies relieve pressure on the dollar', supporting the expansion of stablecoins (95% of stablecoins are dollar-backed).
Policy tilt attracts institutional participation, as Coinbase's stock price reaches an all-time high due to compliance expectations, and BlackRock increases its Bitcoin holdings.
Global Payment System Reform
Tariffs have increased the cost of traditional cross-border settlement, promoting cryptocurrency payment applications:
Companies use cryptocurrencies to bypass tariff chain transmission (e.g., using stablecoin settlement in re-export trade from Vietnam and Mexico).
The EU allows licensed companies to swap stablecoins across borders, and the Canadian digital services tax dispute may accelerate this process.
4. Reverse Logic in Special Situations
Liquidity return after easing geopolitical conflicts
When tariff tensions compound with easing geopolitical risks, the crypto market quickly rebounds:
In June 2025, the Iran-Israel ceasefire agreement was announced, and Bitcoin rose over 4% within 24 hours, breaking $105,000.
U.S. stocks hit new highs under tariff threats (S&P 500 broke 6173 points), boosting sentiment in the crypto market.
Policy uncertainty gives rise to the 'Trump Trade'
The market ties tariff policies to the Trump family's words and actions, forming a short-term speculative model:
Trump's tariff tweet → Stock/Crypto market drop → Policy reversal expectations → Funds bottoming out in crypto assets.
For example, on April 9, after a 90-day tariff delay, Bitcoin rebounded 7% that day.
Short-term Market Volatility Risk Asset Sell-off → Leverage Liquidation
Bitcoin drops 4% in a single day
Dollar credit reconstruction Inflation pressure → Demand for stablecoin alternatives Dollar stablecoins account for 95% of the market
Policy arbitrage Family maneuvering + Policy catalysis $TRUMP coin market cap surges
Geopolitical game buffer Risk easing → Liquidity return Middle East ceasefire prompts Bitcoin to break $105,000
Long-term financial infrastructure Compliance promotion + Cross-border payment reform EU stablecoin swap mechanism
Currently (June 2025), the core variable is the policy rollout after the July 9 tariff delay expires. If Trump further escalates tariffs (e.g., raising the rate on China to 125%), it may repeat the April market crash; conversely, if an agreement is reached, the crypto market may see a liquidity-driven rebound.
Market uncontrollable, but public sentiment controllable