Bitcoin Surges 5% to $88,713 on Easing Tariff Reports, Then Drops on Venezuela Tariffs

Bitcoin's price experienced a significant surge, reaching an all-time high of $88,713, driven by reports of easing trade tariffs on key allies by the Trump administration. This development sparked optimism in the markets, with Bitcoin climbing from $84,000 over the weekend. The reports suggested that the US would impose smaller tariffs than previously announced, leading to a market-wide rally. All top 10 cryptocurrencies by market capitalization reacted positively, with Ethereum increasing by 4%, XRP by 2%, and Solana by 8%. The Nasdaq and S&P 500 stocks also saw a moderate increase, growing by 2% in value. This surge in Bitcoin's price coincided with reports that the Trump administration was considering narrowing the scope of tariffs set to take effect on April 2, according to Dan Greer, the CEO of Defi App.

However, the euphoria was short-lived as the announcement of new tariffs on Venezuela triggered fears of a renewed downturn. The sudden imposition of these tariffs led to a sharp decline in Bitcoin's price, leaving market participants to speculate on the future trajectory of the cryptocurrency. The hesitation from the US president has led to the crypto and stock market’s resurgence in value. Such development highlights that if the fear of a trade war increases, the risk markets will fall in response. As such, another fall might be coming as the White House announced that the final decision has not been made. The officials stated that it is not determined whether sector-specific tariffs will be imposed or not.

Trump’s approach towards foreign affairs has been aggressive. As such, with the recent reports, many had hoped that he had changed this approach, avoiding global turmoil. However, today, Trump shared a Truth Social post on his official account, which has caused a resurgence of economic fears. Based on his announcement, the USA is now imposing a secondary tariff on Venezuela. This means that all countries that purchase oil or gas from Venezuela will be hit with a 25% tariff on imports. With the continuation of Trump’s ever-increasing tariffs, the market will probably experience a dive again. This is because, historically, such policies have led to negative reactions from markets, the most recent example being Trump’s previous tariffs. On the day of Trump’s inauguration, we saw a Bitcoin price surge to $108,000. However, with each mention and announcement of tariffs by Trump, the market would experience a sharp decline. Trump has been announcing and delaying the tariffs for almost three months now. This has led to investors’ exhaustion and consecutive downtrends in the crypto, wiping out the bullish sentiment.

If the USA’s global policy continues, the trade war will likely escalate further. This is because the countries targeted by Trump trade tariffs, such as Canada and China, have been announcing countermeasures. For example, both China and Canada have announced their counter-tariffs on American goods and imports. Additionally, these policies have damaged the USA’s relations with its European and North American allies. As such, investors should follow these developments closely.