The latest measures include a significant 34% tariff on Chinese imports and a 25% levy on automobiles, creating a challenging environment for investors trying to balance risks and opportunities.<\/p>\n
Typically, such tariffs drive inflation and bolster the U.S. dollar by making imports more expensive. A stronger dollar usually exerts downward pressure on cryptocurrencies as investors flock to traditional safe-haven assets. However, if economic instability persists, Bitcoin\u2019s reputation as a store of value could gain traction, especially if central banks respond with more accommodative monetary policies.<\/p>\n
Rick Maeda, a research analyst at Presto Research, noted that the tariffs have already impacted crypto markets, with Bitcoin dropping to $82,000 and Ethereum slipping below $1,800. Despite increased options trading, the market\u2019s implied volatility remained surprisingly stable, indicating that investors are still assessing the longer-term effects.<\/p>\n
Enmanuel Cardozo from Brickken pointed out that Bitcoin\u2019s sharp decline from $88,500 to $82,000 shortly after the tariff announcement signals heightened volatility. While institutional investors are still accumulating Bitcoin, retail participants are shifting toward safer assets like gold. Cardozo suggests that in the longer term, tariffs might actually benefit crypto, as inflation concerns and a weakening dollar could make Bitcoin more appealing as a hedge. A JPMorgan survey supports this view, with over half of institutional investors citing inflation and tariffs as key market factors.<\/p>\n