The trade policies of U.S. President Donald Trump, particularly tariffs on imports from Canada, Mexico, and China, have drawn significant attention in the global economy. These measures are important not only for trade but also for the global cryptocurrency market.
Impact of Trade Wars on the Crypto Market
The cryptocurrency market has traditionally been sensitive to global economic events. Trump's announcement of tariffs led to an immediate drop in prices of major cryptocurrencies like Bitcoin and Ethereum. Bitcoin, often seen as a store of value, dropped from a peak of $107,000 in January 2025 to about $91,000. Ethereum also faced a sharp decline, touching $2,320 — its lowest since September 2024.
Role of Tariffs in Cryptocurrency Value Change
Tariffs can lead to increased inflationary pressure. As the cost of goods rises due to tariffs, central banks may raise interest rates to combat inflation, potentially strengthening the U.S. dollar. A stronger dollar might lead to lower Bitcoin prices as Bitcoin and the dollar historically move in opposite directions, which could result in diminished market confidence in cryptocurrencies.
Investor Sentiment and Meme Coins
The broader cryptocurrency market, including altcoins and meme coins, has suffered significant losses. Meme coins, which are highly volatile and lack intrinsic value, have particularly been affected. The slump in these tokens reflects a broader market trend, as fears of global economic instability grow, investors tend to retreat from speculative and high-risk assets.
While short-term reactions to Trump's tariffs may be negative, some investors see long-term benefits for Bitcoin due to the weakening U.S. dollar and renewed interest in alternative stores of value.
