Bitcoin Drops to $81,000 as Trump Tariffs Impact Stock Market
Published: April 3, 2025, 9:08 AM EDT
Updated: April 3, 2025, 4:04 PM EDT
By: Tanaya Macheel
In a day marked by turbulence across financial markets, Bitcoin fell sharply to $81,000, representing a 5% decrease, as President Donald Trump’s new tariffs rattled investor sentiment. This downturn in cryptocurrency was reflected across the board, with Bitcoin’s price reported at $81,914.63, according to data from Coin Metrics. Ether, the second-largest cryptocurrency by market capitalization, experienced a decline of 6%, while tokens associated with Solana plummeted by 11%.
Market Reactions to Tariff Announcements
Investor anxiety surged following President Trump’s announcement of sweeping tariffs on imports, initiating a trade policy that would impose increased tariffs starting at a minimum of 10%, with certain countries facing even steeper rates. This move has sparked fears of escalating trade tensions and potential ramifications for the global economy, jolting numerous sectors including equities and cryptocurrencies.
In an extraordinary response, the S&P 500 marked its largest single-day loss since 2020, with notable declines in shares of cryptocurrency-related companies like Coinbase, which fell approximately 7%, and MicroStrategy, which dropped around 10%.
Analysis of Bitcoin as a Macro Asset
Ben Kurland, CEO of the cryptocurrency research platform DYOR, noted that Bitcoin is increasingly behaving like a high-beta macro asset, influenced by broader economic factors such as real yields, interest rate expectations, and the strength of the U.S. dollar. “Bitcoin moves at the intersection of narrative, liquidity, and leverage,” Kurland said. He elaborated that when real interest rates decrease and the dollar weakens, Bitcoin tends to react positively.
Over the past month, Bitcoin had been hovering between the $80,000 and $90,000 range, driven more by conditions in the equities market rather than specific developments within the cryptocurrency sector.
Investor Sentiment and Future Outlook
Despite the recent volatility, David Hernandez, a crypto investment specialist at 21Shares, highlighted that the crypto markets have shown relative resilience compared to traditional equities. He emphasized that Bitcoin maintaining its position above key technical support levels indicates a robust underlying demand from investors.
Hernandez also provided insight into how the tariff announcement, despite being higher than some market participants had anticipated, brought clarity to the trade policy landscape. “Markets thrive on certainty,” he stated, suggesting that institutional investors might now see an opportunity as valuations become compressed in the wake of the news.
Looking forward, analysts expect continued volatility for Bitcoin in April as traders adjust to evolving trade policies and await fresh drivers of growth.
Conclusion
As Bitcoin’s price continues to experience significant fluctuations in response to macroeconomic factors, traders and investors will need to remain vigilant. The impact of policy changes, such as the tariffs announced by President Trump, serves as a reminder of the interconnectedness of global markets and the volatility that can ensue when investor confidence is shaken.
Share this article:
