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Trump's Tariffs Send Bitcoin Tumbling Towards $81K
Summary: Bitcoin's price took a significant hit on Wednesday, plunging over 8% and hitting a low of $81,282.10, after U.S. President Donald Trump announced new "reciprocal tariffs" on several major trading partners, including China and the EU. The move sent ripples through global financial markets, and the cryptocurrency sector wasn't immune. Bitcoin, which had been ...
Bitcoin's price took a significant hit on Wednesday, plunging over 8% and hitting a low of $81,282.10, after U.S. President Donald Trump announced new "reciprocal tariffs" on several major trading partners, including China and the EU. The move sent ripples through global financial markets, and the cryptocurrency sector wasn't immune.
Bitcoin, which had been trading as high as $88,000, saw a sharp decline before recovering slightly to around $83,538 later in the day. Other major cryptocurrencies like Ethereum and Ripple's XRP also experienced similar drops.
The immediate market reaction reflects investor concerns about potential economic slowdown and rising inflation stemming from the new trade policies. Traditionally, increased economic uncertainty prompts investors to seek safe-haven assets like gold, while riskier assets such as cryptocurrencies often face selling pressure.
However, analysts hold differing views on the long-term implications for Bitcoin.
Zach Pandl, Head of Research at Grayscale, suggests that tariffs could weaken the U.S. dollar's dominance, potentially creating an opportunity for alternative assets like Bitcoin.
Omid Malekan, adjunct professor at Columbia Business School, notes that while Bitcoin currently behaves like a high-risk tech asset, it could evolve into a "new safe haven" in the digital age.
Conversely, James Butterfill, Head of Research at CoinShares, believes that tariffs could lead to slower economic growth, dampening demand for risk assets like Bitcoin. He also suggests that increased inflation could fuel expectations of higher interest rates, further weighing on Bitcoin's price.
While the short-term impact of Trump's tariff policy on Bitcoin appears to be negative, its long-term role as a decentralized and non-sovereign asset in a potentially reshaping global trade and monetary system remains a subject of debate. Investors should closely monitor macroeconomic indicators and policy developments to inform their investment strategies.
