Traders React to U.S. Tariffs: Mixed Sentiments as Bitcoin Gains Appeal as a Hedge
The recent rollout of tariffs under the Trump administration has stirred a range of reactions in the crypto market, with some traders looking toward Bitcoin (BTC) as a capital preservation tool, while others anticipate a potential decline toward the $70,000 range in the short term. Here’s how market experts are interpreting these developments.
The implementation of heavy tariffs, which significantly increase the cost of imports, often leads to inflationary pressure, shifts in global supply chains, and fluctuations in currency values. A stronger U.S. dollar, potentially spurred by the trade imbalances created by these tariffs, could initially put downward pressure on cryptocurrency prices as investors flock to traditional safe-haven assets like gold.
However, prolonged economic uncertainty might bolster Bitcoin’s appeal as a store of value, particularly if central banks take a dovish approach with monetary policies.
Rick Maeda, Research Analyst at Presto Research
The new wave of tariffs, with the U.S. imposing 34% on Chinese goods and 25% on cars, has caused widespread market volatility, and the crypto market hasn’t been immune. Bitcoin saw a sell-off, dropping to $82,000, while Ethereum fell below $1,800. As traders hedge their positions with put options, implied volatility has remained relatively stable, reflecting the ongoing uncertainty.
Crypto remains heavily influenced by macroeconomic forces and has struggled to escape its risk asset label. A prolonged trade war may continue to weigh on market sentiment, despite Bitcoin’s previous reputation as “digital gold.”
Enmanuel Cardozo, Market Analyst at Brickken
The April 2 tariff announcement has added fuel to the ongoing volatility, with Bitcoin dropping sharply from $88,500 to around $82,000 within hours. Short-term, we’re likely to see a consolidation phase as the market waits for more clarity, with retail investors flocking to traditional assets while institutional players remain focused on accumulating Bitcoin.
The tariffs could weaken the dollar’s dominance, pushing Bitcoin higher as a hedge against inflation. Meanwhile, the use of stablecoins as alternatives to fiat could see increased adoption in response to trade barriers.
Alvin Kan, COO at Bitget Wallet
The tariffs could fuel stagflation, where rising prices occur without corresponding growth, eroding confidence in fiat currencies, especially the U.S. dollar. Bitcoin, with its decentralized nature, stands out as a safe haven for capital amid these inflationary pressures. In this environment, demand for Bitcoin as a store of value could surge as the U.S. dollar weakens.
Augustine Fan, Head of Insights at SignalPlus
Global trade tensions have led to a risk-off market sentiment, with Bitcoin following the broader market sell-off but holding above the $80,000 mark. While the U.S. equities market has underperformed, Bitcoin has shown relative strength, supported by the weaker dollar and stronger gold prices.
We expect a continued risk-off trend, with Bitcoin gaining traction as investors seek quality assets in uncertain times. The $76,000–$77,000 price range could be an ideal buy zone for traders.
Ryan Lee, Chief Analyst at Bitget Research
Trump’s aggressive tariffs, which range from 10-49% on various imports, sparked a sell-off in the wider market, with Ethereum and Solana dropping around 6%. The market quickly shifted to stablecoins as fear took hold. As these tariffs threaten to slow U.S. economic growth, inflation may rise, further fueling the demand for Bitcoin.
Economic pressure on the U.S. could result in a weakening dollar, with potential easing from the Federal Reserve driving Bitcoin’s appeal as a hedge. Early signs of accumulation indicate that Bitcoin may see long-term gains, while altcoins might struggle unless they can present stronger fundamentals.
