🇺🇸 Trump’s Tariffs ↔ Crypto Market Ripples 💥
Recent headline-making tariffs—from 25% levies on Japan/Korea to sweeping threats against BRICS allies—have shaken investor sentiment across financial markets. Here’s what’s happening in crypto:
📉 Short-Term Market Shock
On July 7, Bitcoin dropped ~0.8% (to ~$108K) and Ethereum slipped ~0.6% as traders fled volatile assets amid tariff worries (ainvest.com).
Earlier this week, a 25% tariff on Japan/South Korea triggered a ~$860 drop in Bitcoin, spurred by risk-off sentiment (m.economictimes.com).
🔁 Cyclical Volatility & Correlation
Crypto now mirrors broader market moves: sharp falls as tariffs hit, followed by rebounds once pause periods kick in. In early April, BTC plunged to ~$74.5K—a 15% dip—then recovered when a 90‑day pause took effect (ccn.com).
Correlation between Bitcoin, the S&P 500/Nasdaq, and inflation expectations is reasserting itself (barrons.com).
🛠️ Broader Impacts
Tariffs disrupt supply chains, raising costs for crypto miners (especially hardware-dependent operations), and may push mining rig manufacturers like Bitmain and MicroBT to establish U.S. production to avoid duties (reuters.com).
Inflation pressure from tariffs could sway Federal Reserve policy: slower growth → slower rate hikes → liquidity tailwinds for crypto (mitrade.com).
🔮 Market Outlook
Short term: Expect ongoing volatility. Tariff letters and looming deadlines (e.g., July 9, Aug 1) still haven't fully played out .
Mid to long term: Crypto may respond positively if inflation concerns persist, USD weakens, or if market enters a global "safe‑haven" mindset .
In summary: Trump’s tariffs are injecting macro‑economic uncertainty, triggering short‑term weakness across crypto and traditional markets. But in a longer view, inflationary pressures or Fed easing could swing sentiment back in crypto’s favor. Momentum will hinge on how trade-policy drama unfolds in the weeks ahead.