The announcement by U.S. President Donald Trump regarding new tariff levels on April 2nd, referred to as "Liberation Day", is attracting the attention of global financial markets, including the cryptocurrency market.
- Market sentiment and price volatility: Uncertainty around tariff policies may heighten risk-averse sentiment, leading to price volatility in the cryptocurrency market. In the past, Bitcoin and other digital assets have been viewed as "digital gold", attracting capital flows as a hedge against risk amid economic instability.
- Impact on capital flows and liquidity: Tariffs may affect cross-border capital flows, increasing the demand for stablecoins like USDT or USDC for international payments. However, this could also lead to closer scrutiny from regulatory bodies regarding the use of cryptocurrencies to avoid capital control measures.
- Mining costs and infrastructure: If tariffs affect the import of mining equipment or related hardware, cryptocurrency mining costs may rise, impacting the profits of miners and potentially affecting the entire network.
Ahead of the upcoming tariff announcement, the cryptocurrency market has recorded a significant decline. Last week, the cryptocurrency market capitalization lost more than $130 billion, with major coins like $BTC , $ETH , $XRP , SOL experiencing a sharp drop of 5~15%. Especially the ETH 🤬