President Trump’s Liberation Day tariffs have wreaked havoc in the traditional markets with the DOW down 1,400 points creating a red day for markets and Bitcoin.
The S&P 500 fell by -4.8% with almost all top tech stocks falling over 5% as countries around the world come to terms with Trump’s “reciprocal” tariffs.
Despite the blood in the traditional markets, crypto markets and Bitcoin have held up well, managing to withstand a fall below $80k as of April 4. Looking forward, could the worst of it be priced in already?
Crypto and TradFi react to new Trump tariffs
On April 2, 2025, President Trump’s tariffs caused widespread chaos after Trump signed an executive order stating that any nation that has had tariffs on the US to receive a minimum 10% levy, followed by individual raised tariffs against the European Union and others.
Financial analysts have yet to totally weigh in on the impact these tariffs will have in the long term. Currently, some nations are working with Trump to have their tariffs reduced.
Some reports believe investors may find new alternative markets for their cash, with the cryptocurrency market being one of those alternative markets as Trump pushes pro-crypto regulations.
While stocks and risk assets plummeted, the price of gold reached a new all-time high of $3,167.57/oz while silver fell -6%.
Before and during Trump’s April 2 announcement, Bitcoin climbed to $88,500 before falling to lows of $84k after the event concluded, wiping $2.7 trillion from the total cryptocurrency market.
Markets investor Michaël van de Poppe told investors that Trump’s tariffs will not be as bad as everybody is expecting them to be:
“The Tariffs won’t be as bad as the entire population expects them to be. Uncertainty fades away. Gold will drop. ‘Buy the rumor, sell the news’”
In response to the market’s reaction, Trump said the market was a “sick” patient but that the operation is now over:
“It’s what you’d expect. The patient was very sick. The economy was in a lot of trouble. He was a sick patient. He had surgery. It’s going to be a booming economy. It’s going to be incredible. We’re going to have trillions coming in.” “The operation is over. And now we let it settle in.”
In response to Trump’s tariffs, China’s Xi Jinping announced an additional 34%+ tariff on all US goods.
Cryptocurrency market and Bitcoin hold up amid uncertain economy
Zooming out on the cryptocurrency market, Bitcoin has weathered the storm substantially well. To quote Crypto Currently, Bitcoin’s post-election performance is up 60% over the S&P500’s 7%. Post-inauguration, Bitcoin is down 22% with the S&P 500 down -9%.
The cryptocurrency market has a lot to look forward to in the next few months as Trump’s administration’s GENIUS and STABLE Act’s are set to be debated before being approved.
Both regulatory acts will allow institutional firms to adopt and integrate cryptocurrencies into their businesses with ease and clear guidelines.
Last week, Arthur Hayes, co-founder of BitMex exchanges asserted his belief that Bitcoin would surge through $100k soon enough. With many believing Trump’s tariffs to have been priced in, investors will now have to sit and wait for results.
