Bitcoin Surges 2.5% as Trump Tariffs Ease Market Fears

On Tuesday, major cryptocurrencies experienced a surge in value as investors anticipated that the tariffs announced by U.S. President Donald Trump on his "Liberation Day" would be less severe than initially feared. This optimism led to a significant increase in investor sentiment, with Bitcoin's price rising to approximately $84,900, marking a more than 2.5% gain over the past 24 hours. The coin briefly touched over $85,000, its highest point since the previous week.

Sid Powell, CEO and co-founder of Maple, noted that traders were optimistic about Trump's tariff announcements, suggesting that the policies might be softer than expected. Powell cautioned, however, that risk assets like cryptocurrencies could face challenges if the tariffs boost the dollar or slow global growth. The volatility in the market is expected to continue as investors await clarity on the impact of the tariffs.

Bitcoin's rise coincided with fluctuations in stocks and other "risk-on" assets, as investors grappled with Trump's unpredictable tariff pronouncements. The president had indicated that he would implement sweeping measures on major trading partners, but on Tuesday, he announced that he had settled on a plan. This news seemed to alleviate some of the market's concerns.

Major altcoins, including Ethereum, Dogecoin, and Solana, also saw gains. Ethereum was priced at $1,917, up 4% over the past day, while Dogecoin stood at a little over $0.17, a 3% rise. Cardano was up 2.5%. These coins, along with Bitcoin, had been experiencing a downturn in recent weeks due to fears of a global trade war triggering stagflation—a combination of declining growth and rising inflation. Recent economic indicators, such as the March Purchasing Managers' Index and the Conference Board's consumer confidence index, had pointed downward.

Pedro Lapenta, head of research at Hashdex, suggested that the market should remain cautious, awaiting greater clarity on the impact of Trump’s tariffs. He noted that there would be continued volatility in global markets as the tariffs take shape. However, the crypto price spike on Tuesday indicated that the market was shifting toward a buyer’s mode and anticipated a less severe impact from the tariff announcements. Institutional demand was also picking up, he added.

Other risk-on markets, such as the tech-focused Nasdaq and S&P 500, also saw gains on Tuesday, rising 0.87% and 0.38% respectively. Traditional safe-haven gold also ticked up, continuing its recent upward trend.

Trump is set to announce his tariffs with immediate effect in a Rose Garden ceremony at the White House on Wednesday. He has indicated that he is unconcerned about their short-term impact. Joe DiPasquale, CEO of crypto fund manager BitBull Capital, wrote that investors had grown more optimistic that the tariffs would be more targeted, excluding some countries and avoiding cumulative levies on specific goods. This optimism helped lead to a modest recovery in crypto markets. However, the overall market remains cautious, as the full impact of the tariffs will depend on their final scope and implementation. Therefore, while there is some optimism, the situation remains fluid, and investor sentiment could shift as more details emerge.