Global markets experience turbulence as Bitcoins plummet following unsettling tariff updates.
In the wake of U.S. President Donald Trump's announcement of new tariffs, Bitcoin prices plummeted on April 4, 2025, resulting in substantial losses for the cryptocurrency. According to CoinMarketCap, Bitcoin fell to around $81,300, representing a 7% drop from its peak of nearly $88,000 the previous day. Since reaching this low, Bitcoin has made a slight recovery, currently trading at approximately $83,000.
Trump announced a 10% tariff on all countries, invoking his authority under a 1977 law. This tariff is set to take effect on April 5, with additional levies on specific countries, such as China, starting on April 9. The impending tariffs caused concern among investors, leading to a sell-off of risky assets like Bitcoin. Consequently, the U.S. stock market also experienced a sharp decline the following day, with the S&P 500 losing 4.8% and the Nasdaq falling by approximately 6%.
Tim Enneking, a managing partner at Psalion, suggested that Trump timed the announcement to avoid immediate harm to stocks by releasing it after the stock market closed. However, since the crypto markets operate continuously, Bitcoin reacted promptly, plummeting from its previous high of $88,000.
Investors typically view Bitcoin as a risky asset, and when markets grow uncertain, they tend to sell risky investments like Bitcoin to secure their funds in safer options. Brett Sifling, a wealth manager at Gerber Kawasaki, explained this trend, noting the significant drop in tech stocks as evidence.
However, Wendy O, a TikTok influencer, proposed that other factors might have played a role in Bitcoin's drop. She highlighted that Bitcoin had been on a downward trajectory since January, when its value was $109,000. Moreover, after breaking below the key support level of $85,000, Bitcoin became more susceptible to further declines.
Additionally, the price of gold hit a new record high of about $3,170 on April 3, 2025, according to Kitco News. Gold, like Bitcoin, serves as a hedge against inflation and global uncertainty. However, the correlation between the two markets was not directly addressed in the context of the Bitcoin drop on April 4, 2025.
As Bitcoin continues to adapt to changing market conditions and geopolitical events, investors and analysts will closely monitor its performance moving forward.
Finance analysts started discussing the effect of Trump's tariff announcements on the cryptocurrency market, with a particular focus on Bitcoin. They highlighted that the impending tariffs induced fear among investors, causing a sell-off in riskier investments like Bitcoin and triggering a 7% drop in its value to around $81,300. Meanwhile, technology experts pointed out Bitcoin's diminishing value since January, when its price was $109,000, and its increased susceptibility to declines after breaking the key support level of $85,000 as additional factors influencing its recent fall.
