Crypto Markets Plunge as Trump Imposes Global Tariffs

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The crypto market took a sharp hit after the U.S. President Donald Trump declared a national emergency and imposed a broad 10% tariff on all imports, with steeper rates targeting major economies like China, Japan, and the European Union.

Initially, traders responded with optimism, pushing Bitcoin (BTC) to a session high of $88,500. However, as the full scope of the policy became clear, the market turned red, with Bitcoin sliding 2.6% to $83,300 at the time of writing.

Ethereum (ETH) faced an even harsher decline, falling over 6% from $1,934 to $1,797, while the total crypto market capitalization shrank by 5.3% to $2.7 trillion, according to CoinMarketCap data. The Crypto Fear & Greed Index, which gauges investor sentiment, plunged to 25—signaling “extreme fear.”

Traditional markets weren’t spared either. The S&P 500 wiped out over $2 trillion in market value in just minutes, reflecting the broader economic uncertainty triggered by the tariff escalation.

Traders Brace for More Volatility

Market analysts believe the initial crypto rally was driven by traders welcoming an end to uncertainty. Rachael Lucas, a crypto analyst at BTC Markets, described the reaction as “uncertainty relief,” quickly followed by sell-offs as investors grasped the broader economic implications.

“On BTC Markets, trading volume surged 46% as local traders scrambled to reposition. Big players took profit on the spike, while smaller investors hesitated,” Lucas explained. She warned that any retaliatory tariffs from China or the European Union could trigger another round of panic selling.

Despite the downturn, investors await signals from major economies on whether they will respond with countermeasures.

Will Tariffs Bring Long-Term Crypto Market Stability?

Some experts suggest that while the immediate reaction was negative, the clarity provided by Trump’s announcement could stabilize markets in the long run. David Hernandez, a crypto investment specialist at 21Shares, noted that institutions may take advantage of current price dips.

“Although the tariff rates were slightly higher than expected, the announcement provided much-needed clarity on the scope and scale of the policy,” Hernandez said.

“Markets thrive on certainty, and with speculation now largely removed, institutional investors may see an opportunity over the coming days to take advantage of compressed valuations.”

As global markets digest the news, much will depend on how countries like China, Japan, and South Korea respond.



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