U.S. President Donald Trump's tariff announcement hit the crypto market hard, leading to widespread investor panic.
Impact on the Crypto Market
Following Trump's declaration of a national emergency and imposition of tariffs, traders initially responded positively, pushing Bitcoin (BTC) to $88,500. However, the market soon turned red, with Bitcoin falling 2.6% to $83,300. Ethereum (ETH) faced a harsher decline, dropping over 6% from $1,934 to $1,797. The total crypto market capitalization shrank by 5.3% to $2.7 trillion, and the Crypto Fear & Greed Index plunged to 25, signaling 'extreme fear.'
Anticipating Volatility
Market analysts suggest that the initial rally was due to 'uncertainty relief' but was followed by sell-offs. Rachael Lucas from BTC Markets noted a 46% surge in trading volume but warned of potential further declines if China or the European Union retaliate.
Long-Term Crypto Market Outlook
Some experts propose that while the immediate reaction was negative, Trump's announcement could foster long-term market stability. David Hernandez from 21Shares pointed out that despite higher tariffs, the clarity provided may attract institutional investors.
Experts highlight that the responses from countries like China and Japan to U.S. actions will significantly influence future developments in the crypto market.
