Trump's tariffs collide with the cryptocurrency revolution, creating new global market dynamics

In recent weeks, talks of a Bitcoin crash have echoed through financial markets, with prices dipping sharply from their January 2025 peak of almost $100000 to below $75000

Recent weeks have seen a buzz around Bitcoin crash as prices have fallen sharply from a January 2025 peak of nearly $110,000 to below $75,000 by early April, also going below $50,000 briefly. This volatility has also brought President Donald Trump’s crypto plans into focus. The president and his ally Elon Musk have been open supporters of cryptocurrency, which is gaining more political clout in Washington.

This support is weaving together interesting threads of elite thinking in the Trump era—from Trump’s vision of American economic dominance to Musk’s warnings against protectionism. It also raises questions about the international stability implications of Trump’s aggressive tariff policies and how they can interfere with cryptocurrency prices.

In the past 11 weeks of Trump’s presidency, Dogecoin (dogecoin price) has plummeted more than two-thirds in value.

Other major cryptocurrencies, such as Cardano (ada price), Ethereum (eth price), and Solana, have also crashed heavily, losing over 50% of their value. This stands in contrast to a report by a Bitcoin bull claiming that there are "no tariffs on Bitcoin."

However, Bitcoin has reached its lowest level since November, and the analysis by crypto analyst Garrick Hileman suggests that Bitcoin trades more like a volatile tech stock than a stable hedge.

Indeed, varying reports by the U.S. media have stated that Trump’s administration is planning to slap 10% to 125% tariffs on imports from China, Canada, Mexico, and other countries. The reports add that the tariffs could be paused after a 90-day period.

After the tariff announcements, Bitcoin price slid 10%, mirroring tech stock sell-offs as investors pulled out of risky assets.

On the other hand, the tariffs could increase demand for cryptocurrencies as a hedge against economic uncertainty. They could also erode trust in fiat currencies and increase interest in Bitcoin as a borderless alternative.

This view is shared by crypto enthusiasts, such as MicroStrategy CEO Michael Saylor, who argues that cryptocurrencies can thrive amid “hidden risks” faced by the U.S. dollar.

However, the tariffs could raise costs for crypto infrastructure, such as mining rigs, which rely on imported chips from China.

U.S. miners are already grappling with high energy costs, and any price increases could squeeze margins and impact Bitcoin's hash rate.

Moreover, Canada, still a Bitcoin mining hub with about 7% of the global hash rate, would face a 25% tariff on its products, which could disrupt cross-border supply chains critical to North American crypto dominance.

In the cryptocurrency sphere, Trump’s administration is aiming for U.S. leadership in the digital asset space. This goal is being achieved slowly but surely, with the president’s crypto plans including a national Bitcoin stockpile and deregulation.

His campaign pledges and pro-crypto stance have been a key driver of Bitcoin’s 2024 bull run, which saw the asset hit a record high of $109,000 in January.

The president’s inauguration also coincided with Bitcoin’s price surging past the $80,000 mark for the first time this year.

At the same time, Trump’s tariffs are triggering global market turmoil, especially in the technology sector.

After the president announced broad tariffs of 10% to 125% on goods from China, Canada, and Mexico, WTI crude oil price tumbled 9%, dragging down the stock market.

Tech stocks, which had been driving the 2023 bull market, were hit particularly hard, with Apple and Microsoft closing lower on Monday, canceling out earlier gains.

As the president’s administration prepares to impose tariffs of 10% to 125% on imports from China, Canada, Mexico, and other countries, the president’s ally and head of the Department of Government Efficiency (DOGE) has spoken out against the economic toll of protectionism.

"If you're going to put a 100% tariff on a $50,000 car, then the price is going to go up to $100,000," said Elon Musk, known for his roles at electric vehicle company Tesla and SpaceX.

"It's not going to make the car any better, it's not going to create any jobs, and it's not going to help the country. It's just going to make the car more expensive for consumers."

Musk's warnings come as Trump's administration is readying to impose tariffs of 10% to 125% on imports from China, Canada, Mexico, and other countries, aiming to slash the trade deficit and boost U.S. industry.

The tariffs could be paused after a 90-day period, which began