U.S. President Donald Trump's announcement of high tariffs on imports from Canada, Mexico, and China has significantly impacted financial markets, especially in the cryptocurrency sector.
Market Reaction to Tariffs
The markets reacted to the tariff news with a wave of declines. Bitcoin experienced a drop of over 10%, falling to the $91,500 level. Ethereum fell by 36% from its peak, reaching $2,100, while Solana lost 24% of its value, settling at $176.
Institutional Demand for Bitcoin
Experts suggest that Bitcoin may show resilience in the long term. Analysts from Bernstein noted that while Bitcoin is correlated with risk assets in the short term, it continues to serve as a store of value against the dollar. In January 2025, there was a reported net inflow of $5.3 billion into U.S. spot Bitcoin ETFs. MicroStrategy's acquisition of $2.5 billion in Bitcoin indicates robust institutional interest.
Long-term Prospects for Bitcoin
Jeff Park from Bitwise Alpha Strategies argues that tariffs could lead to indirect interest rate reductions and a weaker dollar, potentially causing a sharp increase in Bitcoin's price in the long run. However, analyst Alex Krüger cautioned that this policy might negatively impact the U.S. economy, exerting pressure on Bitcoin. Former Treasury Secretary Lawrence Summers criticized these policies as economically irrational, and hedge fund manager Daniel Loeb believes it's part of a broader strategy. Bernstein forecasts that Bitcoin could reach $200,000 by the end of 2025 due to institutional demand.
Despite current volatility in the crypto market, analysts predict a recovery driven by institutional demand and the long-term economic impact of tariffs.
