Bitcoin Holds Steady Amid Trump Tariffs and Inflation Fears

Bitcoin's price remained relatively stable on Monday, trading at around $97,000, as investors grappled with the impact of new tariffs imposed by former U.S. President Donald Trump and concerns over inflation. The world's largest cryptocurrency was up 0.1% at $97,114.6 by 01:54 ET (06:54 GMT).

Bitcoin's performance mirrored the broader market sentiment, which was dampened by Trump's announcement of 25% tariffs on all U.S. imports of aluminum and steel. This move came just days after the U.S. imposed 10% tariffs on China, which prompted Beijing to retaliate with tariffs on key U.S. exports. The escalating trade tensions sparked liquidity fears and kept investors away from speculative assets like cryptocurrencies.

The prospect of sticky U.S. inflation and high-for-longer U.S. interest rates also pressured Bitcoin, offsetting optimism over friendlier regulations under Trump. The dollar firmed after the tariffs, as traders bet that they would underpin U.S. inflation in the coming months, keeping interest rates high for longer.

Investors are now awaiting the release of U.S. Consumer Price Index (CPI) data on Wednesday. Analysts anticipate a 2.9% year-over-year increase, mirroring December's figures, which showed inflation remaining largely sticky after falling through most of 2024. Federal Reserve officials have cautioned that sticky inflation will give them less impetus to cut interest rates, and some policymakers have expressed uncertainty over the inflationary impact of Trump's policies.

Most altcoins were also subdued, in line with Bitcoin's movement. They moved in narrow ranges, reflecting increased caution towards riskier assets. World no.2 crypto Ether fell 1.1% to $2,635.09 on Monday after losing nearly 15% last week. World no. 3 crypto XRP declined 2.8% to $2.3943, after an over 20% weekly slump. Solana was 1% weaker and Polygon lost 1.8%, while Cardano fell 1.5%. Among meme tokens, Dogecoin fell 2.3%, while $TRUMP slid 9% to a new record