The cryptocurrency market has experienced a sharp decline
The cryptocurrency market has experienced a sharp decline, losing $180 million in value in the last 24 hours, falling 6% to $2.62 trillion. The decline comes in response to sweeping global tariffs announced by US President Donald Trump, which analysts warn could have significant impacts on the crypto industry.
The new tariffs, announced on Wednesday, which Trump dubbed “Liberation Day,” target a range of sectors including Chinese goods and European exports. Analysts believe the move could escalate trade tensions and disrupt global markets.
Tariffs for the crypto industry present new risks, particularly for blockchain developers, mining operations, and liquidity providers. The uncertainty surrounding these policies has fueled investor concerns, leading to risk-off sentiment in financial markets.
Despite the sudden turmoil in the market, some experts have a positive outlook for the future of crypto. “The outcome for crypto is going to be positive, with Bitcoin prices skyrocketing over the long term as institutional investors shift capital away from increasingly unstable US-led institutions,” Zach Burks, CEO of NFT platform Mintology, said in an interview.
But in the short term, investors remain cautious. Risk-off sentiment has seen traders steer clear of volatile assets such as cryptocurrencies and technology stocks, with the tech-heavy Nasdaq 100 down 3.7% in the past day.
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Mateusz Kara, CEO of crypto payment platform Ari10, downplayed concerns about the impact of the tariffs. “The markets were expecting certainty and now they have it,” Kara said. “The real danger was not the tariffs themselves, but the uncertainty.”
As investors adjust their portfolios, many are shifting capital into traditional safe-haven assets such as U.S. bonds and the dollar, but some analysts warn that Trump’s tariffs could pose broader economic risks.
BitMEX founder and Maelstrom CIO Arthur Hayes noted that tariffs aimed at reducing trade imbalances could have unintended consequences for US Treasury bonds. “The effect for Treasuries is that without the issuance of dollars, foreigners cannot buy the bonds,” Hayes wrote in X, suggesting that the Fed may need to step in as a liquidity provider of last resort.
Hayes, who has previously predicted a major Bitcoin rally, argued that a shift towards quantitative easing could send Bitcoin to $250,000 this year.
Amid these macroeconomic shifts, analysts at Swiss investment bank UBS predict the Fed will cut interest rates by 75 to 100 basis points before the end of the year. Such quantitative easing measures typically benefit riskier assets like Bitcoin and tech stocks because they signal increased liquidity in the financial system.
*This is not investment advice.