President Donald Trump's recent announcement of tariffs on imports from the EU and Mexico has noticeably impacted cryptocurrency markets, driving volatility and risk aversion.
The tariffs prompted short-term sell-offs in Bitcoin and Ethereum, with XRP maintaining stability, reflecting broader macroeconomic uncertainty and investor caution.
Trump Imposes Tariffs, EU and China Affected
Donald Trump has announced substantial tariffs impacting the EU, Mexico, and China. The tariffs, including a 30% import tariff, have contributed to changes in cryptocurrency prices.
The tariff announcements were made via Trump's Truth Social account. It affected key political figures like Claudia Sheinbaum and Ursula von der Leyen, causing market volatility, especially in crypto assets. Trump stated, "Mexico has been helping me secure the border. BUT, what Mexico has done, is not enough."
Major Cryptos Hit: Bitcoin and Ether Slide
The tariffs led to a downturn in Bitcoin and Ether prices, with a sell-off in major coins. Observers noticed XRP maintained stability, contrasting with broader market trends.
Expert opinions suggest potential shifts in risk appetite due to tariffs. As Marc Ostwald noted, "This is all about markets’ ‘risk appetite’ which continues to deteriorate, and for the time being drives a wedge between crypto assets and gold, which continues to be the ‘safe haven’ of choice."
Tariff-Induced Crypto Sell-Off Mirrors Past Trends
Historically, tariff announcements have caused short-term sell-offs in cryptocurrencies, similar to reactions observed in earlier tariff implementations. These moves generally align with market aversion trends.
Experts, including Zach Pandl, emphasized potential long-term impacts. There is a possibility for crypto markets to expand their role amidst dollar vulnerability, marking a period of accumulation under macro pressures. Zach Pandl stated, "I think tariffs will weaken the dominant role of the dollar and create space for competitors including bitcoin. Prices have gone down in the short run. But the first few months of the Trump Administration have raised my conviction in the longer term for bitcoin as a global monetary asset."