The announcement of Trump tariffs on global trade partners, especially China, creates a wave of uncertainty that directly affects the crypto market.
When new trade tensions emerge, investors around the world tend to get nervous and engage in "risk-off" selling. This means they pull money out of assets they view as high-risk, which includes cryptocurrencies. As a result, the prices of major digital assets like $BTC , $ETH , and even smaller coins like luna (LUNA) typically experience sharp dips and increased market volatility in the short term.
This reaction happens for two main reasons:
Macro-Fear: Tariffs increase the risk of a global economic slowdown or higher inflation, which makes non-yielding, speculative assets like crypto less attractive compared to safer investments.
Supply Chain Costs: The crypto mining industry relies heavily on specialized hardware (like ASIC miners) often imported from regions targeted by the tariffs. Increased import taxes raise the cost of running mining operations, which can indirectly put pressure on the market and investor confidence.
However, some long-term supporters argue that if trade wars and tariffs continue, they could actually be positive for crypto. As traditional financial systems face stress and fiat currencies potentially weaken, assets like $BTC might eventually be seen as a better, decentralized hedge against inflation and instability. In the short term, though, the immediate effect is usually downward pressure across the whole market.
