Bitcoin Is in a Tailspin – Threatened US Tariffs Also Harm BTC

The price curve of Bitcoin has slipped below $90,000, temporarily even below $84,000. New threats from US President Trump to impose punitive tariffs on the EU are putting a noticeable strain on BTC. What lies ahead?

The dependence of Bitcoin price development on the overall economy has been proven once again: When US President Donald Trump announced punitive tariffs of 25 percent on EU imports yesterday, minutes later important stock indices fell into the red as did the Bitcoin price curve. For BTC, the rally that produced prices of over $100,000 at the beginning of February seems to be over – with current prices of around $86,000, a three-month low has been reached.

The analysts at Kobeissi Letter explain why possible punitive tariffs from the USA are poison for the outlook:

Trump not only threatened the EU with massive punitive tariffs, but also increased the pressure on the US’s neighboring countries Mexico and Canada. When Trump wanted to impose 25 percent punitive tariffs on these important trading partners three weeks ago, Bitcoin experienced a ” Black Monday.” Although Trump then agreed to negotiations instead of immediate action, he has now named April 2 as the date for the punitive tariffs to come into force for Canada and Mexico.

Such an approach would, for example, have a direct impact on the prices of new cars and food imported into the USA. Since Trump risked trade wars, forecasts for annual inflation have shot up from 2.7 to 4.3 percent. In other years, the “digital gold” Bitcoin had positioned itself as an inflation hedge for investors, but this narrative does not (so far) hold up in 2025.

On the contrary: Since Trump started talking about punitive tariffs and trade war, the price of gold has increased by 10 percent and reached historic highs. Bitcoin, on the other hand, had to accept a loss of over 10 percent in the same period from the beginning of February. The analysts leave it open whether this is just a temporary phenomenon or whether gold can win the competition with Bitcoin in the long term.

They emphasize that if the broad-based punitive tariffs were implemented, the USA would impose import tariffs that were higher than ever since 1969. Inflation would then be inevitable and the US central bank would no longer be able to afford to cut interest rates. Bitcoin, but also US stocks, would then be in a difficult situation. When interest rates are high, investors typically avoid risks such as Bitcoin and are conservatively satisfied with interest income.

But Kobeissi Letter also reminds us that Trump’s threats often end in “deals” to his liking. Years of trade wars, which burden the US economy and fuel inflation, cannot really be in Trump’s interest. If compromises are reached quickly, the tide could quickly turn for Bitcoin. But either way: In the second quarter, one must expect the high volatility of the Bitcoin price curve to continue.

Conclusion: Trump’s risky trade policy does not leave Bitcoin unaffected

On the Bitcoin ETF markets, capital has been leaving BTC for the seventh trading day in a row, around 750 million US dollars yesterday. Bitcoin is currently not scoring points there either, but is experiencing a decline in support.

Trump is unlikely to give up punitive tariffs as a political means of pressure, but will want to avoid consequences for the domestic economy. In this area of ​​tension, scenarios are still possible that have a negative impact on the Bitcoin price – it is no coincidence that the sentiment barometer for the crypto markets is now at “fear” and no longer at “neutral” or “greed” as it was in January.

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(Featured image by Worldspectrum via Pexels)

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