Key Points
- Bitcoin’s market value has decreased by 8.29% due to Trump’s new tariff policies.
- The U.S.-China trade war and rising import costs could potentially push Bitcoin’s value below $90K.
The crypto market is feeling the effects of new tariffs imposed by Trump, with Bitcoin’s value decreasing by 8.29%. The market has managed to withstand a rate hike so far, but the question remains how long it can continue to do so.
Pressure on Risk Assets
The impact of the ongoing U.S.-China trade war is becoming more pronounced. Bitcoin has lost over 6% of its market share, resulting in a loss of trillions of dollars. Investors are now turning to safer investments, with Gold (XAU) surging over 3% weekly and reaching a new all-time high of over $2,880 per ounce.
The U.S. dollar index has also risen, exceeding 109 due to a 10% tariff on Chinese imports. This, along with fears of an interest rate hike, is driving investors towards bonds. Despite a lower-than-expected U.S. inflation report, rising import costs could push inflation up and prevent the Fed from cutting rates.
Bitcoin’s Response to the Pressure
During Trump’s first term as President, the U.S.-China trade war escalated and Bitcoin’s value dropped by 72%. However, U.S. imports from China have since decreased by 8 percentage points, and Bitcoin’s status as a “safe haven” has steadily increased over the past seven years.
While Bitcoin still lags behind Gold in terms of market cap and investor trust, a double-digit loss seems unlikely at this point. Even without a rate cut, institutional capital is expected to absorb the pressure. Nonetheless, the risk of investing in crypto assets has increased, making an interest rate hike a significant factor for high-cap investors.
With so much at stake, keeping an eye on the U.S. economic calendar has become more important than ever.
