Bitcoin News Today: Bitcoin's Price Swings Mirror Trump's Tariff Moves: Up, Then Down

Bitcoin's price trajectory has become increasingly entangled with U.S. President Donald Trump's proposed trade policies, as analysts and market participants debate the cryptocurrency's susceptibility to tariff-driven volatility. Recent developments show Bitcoin surging to an all-time high of $126,200 amid a confluence of factors-including Trump's proposed $2,000 "tariff dividend" checks and Federal Reserve rate-cut expectations-before retreating to $118,800 following escalated U.S.-China trade tensions. The price swings underscore the asset's sensitivity to macroeconomic shifts and geopolitical uncertainty.

The initial rally, observed on October 5, was fueled by optimism surrounding Trump's plan to distribute tariff-generated revenue to U.S. citizens. Bitfinex analysts noted this could mirror the 2020 stimulus-driven crypto surge, with institutional inflows via ETFs and a weaker dollar amplifying demand. David Siemer of Wave Digital Assets highlighted the "perfect storm" of ETF inflows, Fed rate cuts, and U.S. government shutdown risks as catalysts for the rally. However, the momentum reversed sharply after Trump announced a "massive increase" in tariffs on Chinese goods, triggering a 6% drop in Bitcoin's price within four days.

The market's response to Trump's tariff threats has been mixed. While some analysts, like Michael Saylor of MicroStrategy, remain bullish, projecting a $150,000 target for Bitcoin by year-end, others caution against overreliance on speculative trends. Alex Blume of Two Prime noted that leveraged trading, not spot demand, is currently driving Bitcoin's moves, with perpetual futures fund rates spiking to 13%. This suggests a precarious rally that may struggle to sustain itself amid heightened liquidation risks.

On-chain data further complicates the outlook. The Coinbase Premium Gap, a metric tracking price differentials between U.S. and global exchanges, surged to $94.02, indicating robust U.S. institutional demand. This aligns with a record $45.3 billion open interest in Bitcoin derivatives, signaling heightened leverage and potential volatility. Conversely, the Profit/Loss (P/L) ratio dipped below 1.0 after Trump's April tariff announcement, reflecting exhausted selling pressure. Tracy Jin of MEXC warned that retaliatory tariffs could undermine Bitcoin's safe-haven status, potentially pushing prices to $76,000–$78,000 in a negative scenario.

The interplay between Bitcoin and traditional assets also highlights market dynamics. Gold outperformed Bitcoin during the October sell-off, rising over 1% to $4,000 per ounce as investors sought risk-off assets. Meanwhile, the U.S. dollar's depreciation, exacerbated by Trump's tariff agenda, has drawn comparisons to 2020, when stimulus checks drove crypto adoption. Jasper De Maere of Wintermute emphasized that regulatory clarity and ETF accessibility have transformed the market since 2020, though he acknowledged that retail-driven rallies remain vulnerable to macro shocks.

Looking ahead, the path for Bitcoin hinges on institutional demand and geopolitical developments. If the Trump administration's policies favor crypto-through regulatory shifts or tax reforms-Bitcoin could reclaim its all-time highs. However, sustained trade tensions and a potential U.S. government shutdown could prolong volatility. Analysts urge caution, noting that Bitcoin's correlation with gold has intensified, raising questions about its unique value proposition as an uncorrelated asset.