Bitcoin Price Stays Flat at $85,000 as Market Faces Uncertainty From Trump's Tariffs and Fed's Inaction

The cryptocurrency market has entered a period of stagnation, with Bitcoin hovering around $85,000 since early April 2025. This plateau reflects a fragile equilibrium between geopolitical tensions, Federal Reserve inaction, and shifting investor sentiment toward risk assets. While Bitcoin’s resilience has outpaced traditional markets, the prolonged uncertainty surrounding President Trump’s aggressive tariff policies and the Fed’s delayed response has left traders cautious.

Tariff Turbulence: A Rollercoaster for Bitcoin

Bitcoin’s recent stability masks significant volatility tied to the administration’s trade policies. On April 2, President Trump announced sweeping tariffs on $3 trillion of imports, including a 25% levy proposed by trade adviser Peter Navarro. Initial rumors of a delay sent Bitcoin surging to $88,000, but the formal announcement triggered a 6.8% drop to $82,000 by April 3. The broader crypto market fell over 4% within 24 hours, with altcoins like Ethereum and Solana plummeting by 6% or more.

However, the April 9 tariff pause—a 90-day reprieve for some levies—sparked a rebound. Bitcoin jumped from below $77,000 to nearly $83,000 within hours, while cryptocurrency stocks like MicroStrategy (MSTR) and Coinbase (COIN) surged 24% and 19%, respectively. The reprieve, driven by warnings from Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick about catastrophic economic consequences, underscored the fragility of the crypto market’s equilibrium.

Despite the pause, Bitcoin has struggled to surpass $85,000. On April 7, Trump threatened a 50% tariff on Chinese goods, reigniting fears of trade escalation. Bitcoin fell 5.7% from its April 2 high, though analysts noted its relative stability compared to equities. The S&P 500, for instance, dropped 10.5% over two days in late March amid tariff fears—a stark contrast to Bitcoin’s 5% decline.

The Fed’s Silence and Stagflation Risks

The Federal Reserve has largely sat on the sidelines, despite Chair Jerome Powell’s warnings of stagflationary risks in early April. Powell acknowledged that Trump’s tariffs—now averaging 12.7% globally but spiking to 245% on Chinese imports—pose a “negative supply shock,” worsening inflation while stifling growth. The Fed’s inaction stems from its limited tools: rate hikes could exacerbate recession risks, while cuts might fuel inflation.

The Fed’s hesitation has amplified market uncertainty. Analysts at BlackRock noted that Bitcoin’s correlation with stocks post-April 9 suggests investors now view both as dollar-denominated assets under geopolitical pressure. This dynamic is particularly alarming given the U.S. debt-to-GDP ratio surpassing 130%, eroding faith in the dollar’s long-term stability.

Bitcoin as a Store of Value Amid Dollar Instability

Bitcoin’s resilience in this environment has drawn comparisons to gold, but with a critical difference: its price is less tied to traditional safe-haven demand. Instead, Bitcoin’s role as a hedge against policy uncertainty is becoming more pronounced.

• ETF Inflows: Bitcoin ETFs saw $218 million in inflows on April 2, reversing prior outflows and signaling institutional confidence.
• Analyst Predictions: Despite the tariffs, 60% of crypto analysts now expect Bitcoin to reach $90,000 by mid-2025, citing reduced uncertainty after the April 9 pause.
• Dollar Distrust: BlackRock CEO Larry Fink’s April 2025 warning—that Bitcoin could supplant the dollar if fiscal discipline falters—has resonated amid the administration’s fiscal recklessness.

Conclusion: Uncertainty’s Double-Edged Sword

Bitcoin’s stagnation at $85,000 reflects a market torn between two forces: the asset’s growing appeal as a store of value and the paralysis caused by unresolved trade wars and Fed inaction. While Bitcoin’s 5.7% decline since April 2 is modest compared to stocks, its ability to stabilize near $83,000 post-pause underscores its role as a refuge in turbulent times.

Investors should note three critical data points:
1. ETF Inflows: The $218 million inflow on April 2 signals institutional confidence in Bitcoin’s long-term viability.
2. Trade Dynamics: China’s retaliatory tariffs (now at 125%) and U.S. threats to expand levies on semiconductors and energy are unlikely to subside soon, keeping volatility high.
3. Fed’s Constraints: With inflation expectations hitting a 44-year high (per the University of Michigan survey), the Fed lacks tools to offset tariff-driven price hikes, prolonging uncertainty.

For now, Bitcoin’s price stagnation is a symptom of unresolved macroeconomic tensions. A resolution—whether through trade negotiations or Fed intervention—could unlock upward momentum. Until then, Bitcoin remains a barometer of faith in the global financial order—and its fragility.