Bitcoin Drops 11% to $80,000 Amid Inflation Fears, Tariff Threats

Bitcoin and crypto prices have experienced a downturn due to inflation concerns and the U.S. president's tariff threats, along with fears of a new hack. The bitcoin price has retreated to around $80,000 per bitcoin after briefly reaching nearly $90,000 this week, despite the confirmation of a significant development in the bitcoin ecosystem.

Legendary crypto trader Arthur Hayes has predicted that the Federal Reserve's actions in April could trigger a substantial increase in the bitcoin price. Hayes, the co-founder of crypto derivatives pioneer BitMex and the founder of the Maelstrom investment company, believes that the Fed is hinting at a return to "stealth" money printing, known as quantitative easing, as it deals with the $36 trillion U.S. debt that has surged since 2020.

Hayes cited comments from Federal Reserve chair Jerome Powell at the latest Fed press conference, where Powell stated that "inflationary aspects of tariffs are transitory." Hayes interpreted this as a signal that tariffs are no longer a significant concern for Powell, and thus should not be for crypto investors either. He suggested that regardless of the tariff rate imposed by the U.S. president, Powell will continue to provide the easy monetary conditions necessary for portfolios to appreciate in fiat dollars.

The U.S. president's latest tariffs, which have caused volatility in the bitcoin price, crypto, and stock markets, are scheduled to take effect on goods from various countries starting April 2. Despite this, the bitcoin price is anticipated to rebound toward $90,000, according to Markus Thielen, the founder of 10x Research. Thielen's prediction is based on a combination of the U.S. president's potential softening of tariffs and the Fed's increasingly dovish stance, which could set the stage for a bitcoin recovery.

Thielen noted that the bitcoin price is attempting to form a bottom, supported by the U.S. president's recent shift toward "flexibility" on the upcoming reciprocal tariffs. He also pointed to Powell's signal that the Fed would "look past short-term inflationary pressures," which could pave the way for future easing. Thielen added that Powell's mildly dovish tone suggests that the Fed's support for stock prices remains intact, providing further backing for a potential recovery in the market.