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Liberation Day: How Will Bitcoin React to Trump’s Tariffs?

Altcoin Bear Market

Bitcoin

Cryptocurrency Digital Asset Donald Trump

Now technically in a bear market, it's unlikely we'll see Bitcoin return above $100,000 anytime soon.

Features writer

Connor Sephton

Features writer

Connor Sephton

About Author

Connor Sephton is a journalist based in London, who also works for Sky News and the BBC as a radio newsreader and online reporter. He has covered crypto since 2018 — reporting from major conferences...

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Last updated:

April 1, 2025

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“Liberation Day” has arrived, but the markets aren’t in a celebratory mood.

At a ceremony in the White House Rose Garden on Wednesday afternoon, Donald Trump is set to wage war on imported goods and introduce a slew on tariffs that will come into force “immediately.”

This is the latest escalation in a trade war that is already enveloping some of America’s closest trading partners — including China, Mexico and Canada.

Reports suggest the president spent most of Tuesday thrashing out the details of this latest round of restrictions with his closest aides. But it’s unclear how big the tariffs will be, what they will affect, and their impact on the global economy.

JPMorgan was especially blunt in a note sent to its clients on Tuesday, admitting:

“We don’t know what tomorrow brings.”

But there is one thing we can say with certainty: Wall Street and the crypto markets hate this policy — and traders are deeply concerned with how all this will unfold.

The tech-heavy Nasdaq 100 has plunged by 7.3% since 2025 began, with Bitcoin now 12% lower than it was on January 1.

BTC has also fallen 22% from all-time highs of $109,114.88 set on inauguration day, technically putting the world’s biggest cryptocurrency into a bear market.

There had been hopes that the Trump administration would dial back on its rhetoric after witnessing these violent sell-offs — but at a briefing, White House Press Secretary Karoline Leavitt made it clear that this is a secondary concern.

“The president has always said that the stock market is a snapshot of a moment in time, and he’s doing what’s best for Main Street. And Wall Street will work out just fine in this administration, just like they did in the first term.”

What Does ‘Liberation Day’ Mean for Bitcoin?

The uncertainty surrounding tariffs means investors have been pulling out of riskier assets — especially Bitcoin.

In gauging how the crypto markets will be affected by Trump’s announcement, there are a few things worth keeping an eye on.

The first is to see how the S&P 500 and Nasdaq 100 react. If they witness a marked fall when the president’s policies are announced, it’s likely BTC will slide too.

Another crucial factor is whether the tariffs end up being better or worse than anticipated. There have been reports that Trump is considering a flat 20% tariff on goods entering the U.S. from around the world, which could have substantial ramifications for global trade. Alternatives include a tiered system based on specific products, or customized rules for individual countries.

While it could be argued that clarity on the president’s plans could be a good thing for the markets — including crypto — clear answers are unlikely to emerge on “Liberation Day” itself. The White House has left the door open for countries that wish to negotiate, and some major economies will take swift action to retaliate.

Of course, there’s no shortage of analysts out there who always like to put a positive spin on things. Some argue that Trump’s tariffs could turn out to be a “sell the rumor, buy the news” event — and put an end to BTC’s bearish malaise.

But as things stand, the one big winner from all of this economic drama is gold. The precious metal accelerated to a new record high of $3,148 an ounce on Tuesday — reinforcing the commodity’s reputation as a safe haven asset. There’s also been an insatiable appetite for gold ETFs, with inflows reaching levels last seen during the coronavirus pandemic.

Bitcoin’s tepid performance of late once again pours cold water on the notion that this asset is a form of “digital gold” — as often touted by the likes of Michael Saylor. Last month, analyst Nate Geraci wrote on X:

“In all seriousness, think interesting spot for btc & crypto… If btc = ‘digital gold’, then time to act like it. Otherwise, will reinforce narrative it’s simply high beta asset. Most of crypto = tech play IMO. So it currently is & will be caught up in broader tech sell-off.”

The next 48 hours could prove to be extremely consequential for BTC. But given Trump’s address will happen after the markets have closed on Wednesday, there might be a little delay before we can appreciate the true impact “Liberation Day” has had on crypto.