Trump's Tariffs Spark Global Trade War Fears, Bitcoin Plunges

Bitcoin's recent crash, triggered by President Trump's tariffs on imports from key trade partners, has sparked fears of a global trade war and sent financial markets into a tailspin. The cryptocurrency's price plummeted to around $91,530, wiping out gains made since December and bringing prices back to where they were before the U.S. election.

Major altcoins such as Dogecoin (DOGE-USD), XRP (XRP-USD), and Cardano (ADA-USD) also suffered steep declines, with the overall crypto market cap dropping by 12%, marking the largest decline in over a year. Futures markets were hit hard, with over $2.2 billion in liquidations in just 24 hours.

Despite the market turmoil, some experts remain optimistic about Bitcoin's long-term potential. Arthur Hayes, former CEO of BitMEX, expects Bitcoin to rebound after an initial fall to $75,000, paving the way for a future bull run. According to Derive.xyz, active filings for crypto spot ETFs by firms like Grayscale and Bitwise could signal further legitimacy and attract institutional capital.

However, the tariffs have also raised concerns about inflation and market volatility. Andre Dragosch of Bitwise pointed out that "tariffs are sending shock waves via USD strength and contraction in global money supply." Analysts believe that if economic pressures persist, the U.S. Federal Reserve may be forced to reignite quantitative easing (QE) to stabilize markets.

Bitwise, a leading cryptocurrency asset manager, predicts a "violent" surge in Bitcoin's price amid Trump's tariffs. The firm believes that the tariffs could limit central banks' ability to ease monetary policy, potentially leading to a rise in inflation. Despite this, Bitwise remains optimistic about the long-term prospects for Bitcoin and digital assets.