In early 2025, escalating global trade tensions significantly affected Bitcoin’s market performance. President Donald Trump imposed substantial tariffs on major trading partners, including China, Canada, and Mexico. This move sent ripples through international markets, impacting both traditional assets and cryptocurrencies. Bitcoin’s price fell by as much as 5.5%, reaching its lowest level in 2025. Shares of major crypto-related firms also declined, with MicroStrategy falling more than 7% and Coinbase dropping 6%. Despite earlier gains driven by optimism over Trump’s pro-crypto stance, companies like Robinhood and Coinbase have now lost much of their post-election momentum. This downturn has led investors to question Bitcoin’s role as a safe-haven asset amid economic instability.
The Initial Shock: Bitcoin’s Sudden Decline
On February 1, 2025, President Donald Trump imposed tariffs of 25% on imports from Canada and Mexico, and 10% on Chinese goods. This decision caused immediate market volatility, with Bitcoin’s price dropping to a three-week low of approximately $91,441.89. The cryptocurrency market reacted sharply, highlighting Bitcoin’s sensitivity to geopolitical events.
Temporary Relief Amidst Ongoing Tensions
Mexico agreed to send troops to its U.S. border to fight illegal activities, which led to a one-month delay in some tariffs. As a result, Bitcoin’s price jumped above $100,000, sparking hope among investors. However, this hope quickly faded as trade disputes continued to affect the markets.
Effects of New Tariffs on U.S. Crypto Market Trends
In late March, President Donald Trump announced plans to make the U.S. a leader in Bitcoin and cryptocurrency by removing previous regulations. He proposed new laws for stablecoins and market structures to boost economic growth and maintain U.S. financial power. This move was expected to encourage more businesses to adopt cryptocurrencies.
However, in early April, the U.S. placed new tariffs on China, leading to retaliatory actions and causing major market disruptions. As a result, Bitcoin’s price dropped to around $78,000, and $1.2 billion in cryptocurrency positions were liquidated. This downturn showed how quickly trade policies can affect the cryptocurrency market.
Bitcoin’s Resilience and Volatility Amid Market Challenges
Despite the challenges, Bitcoin showed more stability than traditional stocks. For example, while the S&P 500 and Nasdaq Composite dropped by 9% and 10%, Bitcoin’s losses were smaller. Experts say Bitcoin’s decentralized nature and resistance to import taxes could make it a more attractive option during trade disputes.
However, Bitcoin’s volatility is still a concern. Analysts warn that if Bitcoin falls below its support level of $73,745, it might drop further to the $55,000–$57,000 range. Additionally, lower trading volumes suggest that investor interest is fading, which reflects the cautious mood in the broader market.
Bottom Line
To sum up, Bitcoin‘s ability to survive global trade wars is still unclear. Although it provides a decentralized option to traditional financial systems, it is still affected by economic factors and market sentiment. Therefore, investors should stay alert and carefully weigh both the opportunities and risks of investing in cryptocurrency, especially in today’s changing geopolitical climate.
About The Author
