Tariffs versus Bitcoin: How Cryptocurrency Reacts to Trump’s Policies

As President Trump’s trade war rages on, tariffs continue to shake financial markets. In a surprising twist, Bitcoin is charting a new path, seemingly unperturbed by these developments and offering unique opportunities.

Contrasting Trends in Crypto and Traditional Markets

Cryptocurrency is currently experiencing some interesting shifts thanks to the ongoing trade strategies put forth by President Trump. Tariffs have stirred the financial markets, promising a tricky road ahead for traditional investments, but there’s a noticeable detachment happening in the world of Bitcoin. While global economic activity is anticipated to slow down as we approach the third quarter of 2025, Bitcoin’s recent performance seems to suggest that the cryptocurrency market is marching to the beat of its own drum.

A Dramatic Trade Policy Landscape

Trump’s unpredictable trade policy, particularly concerning tariffs, has been nothing if not dramatic. The recent announcements saw him target 14 countries with reciprocal tariffs, setting rates somewhere between 25% and 40%. Additionally, he decided to push back broader tariffs until August, shedding light on negotiations that are ongoing. With mid-July as a potential deadline for new trade deals, the atmosphere feels a bit chaotic. Huang from Kronos Research described global trade talks as fragmented and overwhelming, underlining how the US is constantly shifting its demands and stance.

Consumer Costs Skyrocket Amid Tariffs

The effects of these tariffs trickle down to consumers, with a lingering 10% minimum tariff on most US imports, which dramatically raises costs for goods and eats away at business profits. Huang points out that this rise is three to four times higher than the pre-2025 levels, creating a daunting environment for companies used to lower rates. Many rush to stockpile their imports after the initial tariff announcements on key nations like Canada, China, and Mexico back in February, but precautionary measures can only cushion the blow so much. According to the Tax Policy Centre, things are about to get worse, with tariffs projected to surge on various items come August.

Bitcoin’s Resilience Amid Market Turmoil

Interestingly, Bitcoin seems to have found a way to evade the reactive nature observed earlier during Trump’s tariff shifts. When tariffs first reared their head in February, Bitcoin plummeted alongside other markets, hitting below $80,000—its lowest since November 2024. However, as the latest news flooded the markets, Bitcoin has shown a remarkable resilience, detaching itself from the tumult surrounding tariff news. Huang notes that Bitcoin is becoming viewed more as a macro hedge rather than simply speculative, with investors viewing its scarcity and decentralised nature as a sanctuary amid rising inflation fueled by tariffs.

Blockchain: A Solution for Supply Chain Challenges

The technological backbone of cryptocurrencies, particularly blockchain, offers robust solutions amidst this chaotic economic backdrop. Blockchain can streamline supply chains plagued by uncertainties due to unpredictable trade policies. Huang explains that blockchain’s transparent, immutable records offer real-time visibility and combat fraud, letting businesses adapt swiftly to regulatory changes. This adaptability will be essential as the trade landscape continues to shift under the pressure of higher tariffs and turbulent negotiations.

The unfolding situation with Trump’s tariffs is creating significant challenges for consumers and businesses alike, leading to a potential economic slowdown. Yet, Bitcoin and other cryptocurrencies seem to be navigating these turbulent waters differently, exhibiting resilience while also highlighting the utility of blockchain technology in maintaining supply chain integrity. As markets react to announcements, the divergence between crypto performance and traditional market reactions points to a shifting landscape for investors in uncertain times.