Crypto Struggles To Keep Its Cool as Global Markets Buckle Under Tariff Pressure

Key Takeaways

• Donald Trump’s tariffs on major trade partners, with China as the primary target, take effect today.
• Stocks and crypto markets returned to negative sentiment, while safe-haven assets saw a rise.
• Analysts predict the downtrend will continue in the short term.

A new economic era begins today as the world wakes up to a tariff regime unlike decades ago.

With global supply chains already under strain, President Donald Trump’s aggressive trade policy is injecting fresh volatility into the markets.

Experts warn that the fallout will be swift and widespread and is not expected to end soon.

China Leads the Tariff Impact

President Donald Trump’s sweeping tariffs officially took effect today, targeting multiple countries and causing immediate ripples in global markets.

China faced the largest impact, with 104% tariffs — more than any other country — intensifying trade tensions with the U.S.

Southeast Asian nations were also heavily affected. Lesotho faced a 50% tariff, Cambodia 49%, Laos 48%, Vietnam 46%, and Myanmar 44%, threatening disruptions in key manufacturing hubs.

Other major Asian economies, including India (26%), South Korea (25%), and Japan (24%), were also targeted, along with several African nations such as Madagascar, Mauritius, and South Africa.

The European Union now faces a 20% tariff. The tariffs risk triggering retaliatory measures, raising costs, and shaking supply chains — particularly in sectors like technology and textiles, with China and emerging markets most vulnerable.

Global Markets Respond Negatively

Asian markets fell , and U.S. futures tumbled as President Donald Trump’s reciprocal tariffs — the largest in a century — officially took effect.

Japan’s Nikkei dropped 4%, and Hong Kong’s Hang Seng fell 1.5% following Tuesday’s brief rebound. The Hang Seng plunged 13% on Monday, its worst day since the 1997 Asian financial crisis.

South Korea’s Kospi slipped over 1%, entering bear market territory, down 20% from its July 2024 peak. Seoul announced $1.3 billion in emergency aid for its auto sector.

U.S. futures dropped sharply after Tuesday’s volatile session. Dow futures fell by 750 points, or 2%, while S&P 500 and Nasdaq futures slid by 2.2% and 2.5%, respectively.

The S&P 500 was set to enter a bear market, down 20% from its Feb. 19 high, marking the second-fastest drop, only behind the COVID-19 crash.

Safe-Haven Assets See Gains

Amid rising uncertainty, U.S. crude fell over 4% to below $57 per barrel, the lowest since February 2021. Brent crude neared $60 as fears of a recession weighed on energy demand.

As demand for safe-haven assets increased, gold climbed more than 1%, approaching a record high, while U.S. Treasury yields unexpectedly rose.

The 10-year yield bounced above 4.3% after briefly falling below 4%, reflecting investor anxiety across both stock and bond markets.

Crypto Reacts to Tariffs

The crypto market also took a hit, mirroring the sharp declines in equities as President Trump’s tariffs rattled investor sentiment.

The global crypto market cap dropped by 6.0%, falling from $2.65 trillion to $2.49 trillion. Bitcoin (BTC) dropped 6.4%, falling to $77,600 at the time of writing.

Ethereum (ETH) fell by 11%, and Solana (SOL) dropped by 7.1%, signaling a broad shift away from riskier assets.

Crypto-linked stocks also suffered. Coinbase (COIN) dropped 3.7%, while Bitcoin-heavy Strategy (MSTR) tumbled more than 11%.

Analysts Weigh In on the Impact of Tariffs

As U.S. tariffs officially take effect, analysts are divided over the implications for both traditional and crypto markets.

Susannah Streeter, Head of Money and Markets at Hargreaves Lansdown, expressed concerns that the escalating trade war is further deepening market pessimism.

“The feared escalation of the trade war is playing out, sending a fresh wave of pessimism through the markets,” she told CCN. She emphasized that Trump’s approach to trade has caused significant instability:

“Trump continues acting like trade is his plaything, and he’s wound up the equity rollercoaster for another plunge downwards.”

In contrast, some in the crypto world see the situation as a potential opportunity. Andrei Grachev, Managing Partner of DWF Labs, pointed to Bitcoin’s immediate reaction, which dropped to $77,000 but quickly rebounded to nearly $79,000.

“This market doesn’t stay down for long,” he added. “While traditional markets are still figuring out how to react, crypto is showing its typical volatility but also remarkable resilience,” Grachev noted.

Grachev also indicated that the current trade tensions could play into the inflation narrative, a factor that has historically benefited Bitcoin as a hedge.

However, he cautioned that if the trade conflict intensifies, tighter liquidity could pose challenges for the market.

“Looking forward, I’d say the next few weeks will be crucial. If these tariffs escalate into a full-blown trade conflict, we could see investors increasingly turn to crypto as a safe haven. On the flip side, if economic growth takes a serious hit, we might face some headwinds as liquidity tightens,” Grachev expressed.

Pat Zhang, head of research at WOO X, presented a more cautious outlook for Bitcoin, noting the prevailing bearish sentiment.

“Affected by external policies and other factors, the current cryptocurrency market shows a clear bearish sentiment, with BTC’s price returning to the end of 2024 levels,” Zhang explained.

He also identified key support levels, highlighting that Bitcoin’s correction phase may be nearing its end.

“The decline from Bitcoin’s high of $108,000 appears to have run its course, with key market indicators suggesting that the correction phase is largely complete.” Despite the bearish sentiment, Zhang sees potential for a rebound should broader markets stabilize.

The uncertain path ahead is clear. As tariffs reshape the global economic landscape, both traditional assets and digital currencies face a period of volatility that will require careful navigation.