Key Points
- The crypto market has seen significant losses, with Bitcoin’s value dropping due to Trump’s new 25% tariffs on key metals.
- Investors are de-risking and pulling back on high-leverage trades, putting pressure on Bitcoin’s value.
The recent trade restrictions, including a 25% import tax on key metals, have impacted the crypto market.
The “Make in America” campaign led by Trump has resulted in Bitcoin’s value dropping to around $92K.
Market Reaction to Trade Policies
The crypto market lost 12.19% of its market cap in February, a drop that can be attributed to these recent tariffs.
The question now is whether Bitcoin can recover, or if the crypto market is preparing for more losses.
The pressure on Bitcoin has been intensified by Trump’s “America First” strategy.
Investors are now wondering if they should hold out for a recovery or prepare for a crash similar to the one in 2018 when Bitcoin’s value plunged significantly.
Bitcoin’s Performance Amid Trade Restrictions
In the first two months of 2025, Bitcoin experienced two major drops, each reducing its value by over 10%.
This brought its value down from six figures to five.
The most recent drop followed the announcement of Trump’s tariffs, resulting in a surge of Bitcoin deposits across all exchanges.
Investors are now de-risking and pulling back on high-leverage trades due to uncertainty over rate cuts.
The 25% import tax on steel and aluminum could potentially push the Fed’s 2% inflation target further out of reach.
In the short term, Bitcoin has found support between $88K and $90K, attracting both institutional and retail buyers.
However, with so many factors at play, the real bottom for Bitcoin could still be a long way off.
In 2018, when Trump imposed a 10% import tax on Chinese goods, Bitcoin’s value collapsed by 72% by the end of the year.
While a similar crash is not expected this time, the impact of tariffs on the crypto market cannot be ignored.
Investors are still backing the Bitcoin-Trump duo, but confidence is being tested with each new trade policy.
The upcoming CPI report might provide some answers, as 25% tariffs on key metals could be just the beginning.
For Bitcoin’s price prediction for 2025-2026, click here.
The key now is how the administration will handle the fallout, high inflation and fewer rate cuts, or the opposite?
