Trump’s Tariffs Shake the Global Economy and Crypto Market
Donald Trump has implemented ‘reciprocal’ tariffs of at least 10% on almost all imports, with some countries facing tariffs as high as 54%. This protectionist policy has caused significant disruptions in the global economy and financial markets.
Following the announcement, the crypto market experienced a significant downturn. Bitcoin dropped by 4%, Ethereum by 6%, Solana by 9%, and even the memecoin ‘TRUMP’ plummeted by over 12%, reflecting the overall market panic.
The increase in tariffs on imported chips poses a threat to American miners, jeopardizing their profitability and reshaping the mining landscape in the United States.
The Crypto Market Plunges After Trump’s Tariff Announcement
The crypto market reacted sharply to this protectionist escalation. Bitcoin, which had reached $88,000 after the initial 10% tariff announcement, dropped by 4% to $82,000. Altcoins, however, faced even more significant selling pressure. Ethereum fell by 6% to below $1,800, while Solana dropped by 9% to around $115. XRP, Dogecoin, Cardano, BNB, and Tron all suffered significant losses.
Even more obscure assets were not spared. The memecoin ‘TRUMP,’ associated with the former president, plunged by over 12%, falling below $10.
The US stock indices also signaled a chaotic opening, with Nasdaq, Dow Jones, and S&P 500 losing between 2% and 4% in after-hours trading. Tech giants like Apple, Amazon, and Nvidia experienced 5% to 7% declines, contributing to widespread panic.
American Miners Under Pressure
Beyond the immediate impact on prices, this protectionist move could have severe structural consequences for the crypto sector. The mining industry heavily relies on imported ASIC chips from China. Any increase in import costs could jeopardize the profitability of US-based players.
While some miners are already exploring alternative suppliers, options are limited and more expensive. Hardware providers are expected to pass on these tariff increases to their clients, increasing entry barriers for newcomers and putting less efficient operators at risk.
However, these cost increases could temporarily reduce the network’s difficulty, offering some respite to the strongest players in the sector.
A Door Opens for Public Bitcoin Adoption?
An unexpected and potentially significant outcome of this upheaval could be the acquisition of Bitcoin by the US government. Alexander Blume, CEO of Two Prime Digital Assets, notes that Trump previously signed a decree exploring this possibility, provided it is ‘budget-neutral.’ The increased revenue from tariffs could precisely fund this accumulation strategy.
