Cryptocurrency markets faced sharp declines following an unprecedented U.S. tariff increase on imports from China, announced by President Donald Trump. Effective April 9 at 12:01 AM Eastern Time, tariffs on all Chinese goods surged to 104%, creating turmoil across global financial and crypto markets.
Immediately after the White House confirmed the tariff hike, major cryptocurrencies saw notable losses. Bitcoin (BTC) slid to a daily low of $76,508, while Ethereum (ETH) dropped to $1,454. Investors appeared concerned over the potential negative outcomes this escalation might impose on global economic stability.
The decision from the U.S. administration resulted from China’s apparent disregard of a prior ultimatum by President Trump demanding the removal of China’s 34% retaliatory tariffs on American exports. Trump’s move marked one of the most significant escalations in the ongoing trade war between the world’s two largest economies.
The implications of this tariff surge for cryptocurrency and risk assets remain a subject of extensive debate among financial analysts. Aurelie Barthere, an analyst from Nansen, previously characterized such an escalation as a “worst case scenario” for risk-oriented investments, including cryptocurrencies. Barthere warned that escalating trade barriers severely threaten global economic growth, translating into significant pressure for assets deeply dependent on positive growth expectations and investor confidence.
However, not all analysts agreed that this tariff development would negatively impact crypto uniformly. Arthur Hayes, co-founder of crypto exchange BitMEX, argued that the rising U.S.-China tensions might actually fuel Bitcoin’s attractiveness to Chinese investors, primarily as a hedge against a potentially weakening yuan driven by economic uncertainty and inflationary pressures. Such scenarios have historically contributed to increased investor interest in Bitcoin.
Questions remain regarding the longevity and potential direction of U.S. tariff policy moving forward. Market sentiment, captured by prediction platform Polymarket, reflected a noticeable decline in expectations of tariffs easing soon, with the possibility of tariff reductions by July dipping significantly from 64% to around 50%.
