Bitcoin and Crypto Prices Fall as Tariff Changes Spark Market Uncertainty

The crypto market faced another wave of turbulence today, as Bitcoin and related stocks dropped sharply in response to shifting U.S. tariff policies. After a fleeting moment of optimism lifted Bitcoin by over 8% on Wednesday, the digital currency slipped about 4%, falling below the $80,000 mark once again. This decline mirrored broader market unrest, with the Nasdaq tumbling 5.5% after a 12% rally the previous day, as investors grappled with the latest developments in President Donald Trump’s trade agenda.

Crypto related stocks also felt the sting of the downturn. MicroStrategy saw its shares slide by 11.2%, while Coinbase and Marathon Digital dropped 8.1% and 9.3%, respectively. The sell-off gained momentum late in the session following a tweet suggesting a White House official had confirmed an increase in the total tariff rate on China to 145%, up from the 125% figure Trump cited just a day earlier. This news amplified fears of an escalating trade conflict between the world’s two largest economies.

The White House’s Executive Order clarified that the “reciprocal” tariff rate on Chinese goods had jumped from 84% to 125% overnight. When paired with an existing 20% tariff on fentanyl-related products, the combined rate now sits at 145%. In response, China announced plans to cut imports of American movies, a move seen as a direct counterpunch to Trump’s initial tariff salvo, further intensifying the trade war.

Political and Economic Pressures Mount

While cryptocurrencies and stocks faltered, gold emerged as a bright spot, climbing 3% to a record high of $3,168. The U.S. dollar, tracked by the DXY index, weakened significantly, dipping below 101 and erasing its November gains, now down 9% from January peaks. These shifts underscored a market caught in the crosshairs of geopolitical tension and economic uncertainty.

Any further escalation could challenge the Federal Reserve’s ability to navigate its next steps, potentially upending the fragile narrative supporting recent market trends. Meanwhile, Trump is trying to get the Supreme Court to fire Fed Chair Powell. The rapid tariff hike to 145% has already rattled traders, who now face the task of recalibrating expectations amid a flurry of conflicting signals.

For Bitcoin and crypto investors, Thursday’s downturn marked a stark reversal from the prior day’s gains, highlighting the market’s sensitivity to macroeconomic shifts. Gold’s surge, meanwhile, suggested a flight to safety as confidence in riskier assets wavered. The interplay between U.S.-China relations and domestic policy continues to cast a long shadow over financial markets.

As the situation unfolds, analysts expect continued volatility in the days ahead. The cryptocurrency sector, often seen as a barometer of risk appetite, remains tethered to broader economic currents. With trade tensions showing no signs of easing, the path forward for Bitcoin, stocks, and the dollar hinges on the next moves from Washington and Beijing.