Trump's Tariffs and Bitcoin

Bitcoin fell sharply in the wake of Trump's tariff announcement on April 2, going from $84,600 to $75,000 within a week.

For many years after its inception, bitcoin was seen as an investment that traded unlike traditional assets. But as the cryptocurrency’s tumble thanks to US President Donald Trump’s tariffs demonstrates, these days, it’s trading much like any other risky investment.

Indeed, bitcoin fell sharply in the wake of Trump’s tariff announcement on April 2, going from $84,600 to $75,000 within a week. That plunge extended declines that began in February. On January 30, bitcoin was worth over $106,000 after a blistering post-election rally. This drop coincided with a selloff in US stocks, especially technology names. During the week following Trump’s announcement on tariffs, bitcoin shed 10.5%, very close to the 11.6% lost by the S&P 500 and 12.0% by the Nasdaq 100.

“Bitcoin’s heightened correlation with the Nasdaq and S&P 500 reflects its evolving role as a macro-sensitive asset, driven by institutional behavior and policy shifts,” says Adrian Fritz, head of research at 21Shares, a specialized provider of crypto ETPs. “Institutional investors now treat bitcoin similarly to tech stocks, leading to synchronized trading patterns during macroeconomic events. This alignment intensified under Trump’s pro-crypto agenda.”

“Bitcoin might be decentralized, but it does not trade in a vacuum,” explains WisdomTree digital assets research director Dovile Silenskyte. “When macro fear spikes, it gets hit like everything else.”

Trump’s Tariffs and Bitcoin

Trump’s promises to make the United States the new “bitcoin hub” attracted institutional capital, but they also bound bitcoin to political risks impacting traditional markets. Over the past quarter, this evolving relationship has solidified bitcoin’s status as a risk-on asset, says Fritz.

Thus, when the tariffs sparked a global flight to safety, investors rapidly exited both equities and bitcoin, triggering parallel 15% declines in BTC, the Nasdaq, and the S&P 500 as capital mainly rotated into safer havens like gold.

At the same time, when news broke of a 90-day suspension of the tariffs and suddenly the risk-on sentiment came roaring back, bitcoin surged in line with a rally across equities. On April 9, BTC gained 8.2%, while the S&P 500 rallied 9.5%. This rebound was not about crypto fundamentals, it was a classic macro-driven relief rally, showing just how plugged-in bitcoin is to the broader market narrative, says Silenskyte.

For Ferdinando Ametrano, managing director of CheckSig and a professor of Bitcoin and Blockchain Technology at Milan-Bicocca University, bitcoin is a thermometer of globalization, sensitive to international scenarios. One part of the market likens it to North American tech stocks. Another part sees it as digital gold, a safe haven asset. Whoever is right will become clearer in the future. As of today, in the tensest moments, the association with equities typical of the most active market participants prevails, since the other component has a buy-and-hold approach.

Bitcoin Much Less Volatile Than in the Past

Despite the recent swings seen in bitcoin, some point to data suggesting the cryptocurrency has become less volatile.

Over the past five years, bitcoin’s 90-day annualized volatility has been cut nearly in half, from 95% in March 2021 to 52% in March 2025, says Silenskyte. This lower volatility coincides with a structural shift toward institutionalization.

This shift is driven by the development of regulated financial instruments such as spot bitcoin ETFs, options contracts, and volatility-linked derivatives, which enable sophisticated strategies like basis trading and risk-hedged exposure, says Fritz. Major financial institutions are now allocating portions of their portfolios to digital assets. Such institutional footprint has gradually displaced retail-driven speculation, fostering a market structure with tighter bid-ask spreads and reduced gap risks compared with previous cycles, and concurrently reduced bitcoin’s historical volatility.

This lower volatility is also partly due to the fact that bitcoin is a 24/7-traded asset, which means it consistently attracts liquidity, leading to deeper market structures, says Max Shannon, research analyst at CoinShares. As institutional participation grows and market infrastructure matures, this increased depth is gradually helping to reduce the asset’s historical volatility.

What to Expect From Bitcoin Prices Now?

Trump is the first openly pro-crypto US president, and his second term is expected to usher in a friendlier policy environment for crypto markets. But that doesn’t mean it will all be smooth sailing from here.

Investors should expect both volatility and opportunity, says Silenskyte, who adds that macro liquidity remains the single most powerful force in markets and bitcoin is no exception.

Apart from the introduction of favorable