Over the weekend, cryptocurrency markets took a hit following President Donald Trump’s announcement of new tariffs. Bitcoin fell more than 10%, while Ethereum lost 36%. Even more dramatic was the collapse of the major memecoins, which saw a drop of over 40%. This sharp sell-off reflects a wave of risk aversion among investors, worried about the economic consequences of US trade policies.
Market outlook: short-term volatility, long-term upside
Bernstein analysts believe that trade tensions may weigh on the sector in the short term, but see signs of recovery in the long term. According to their study, growing interest from institutional investors and a more favourable regulatory environment in the US could support a new bullish momentum for Bitcoin, with an ambitious price forecast: $200,000 by the end of 2025.
Jeff Park, head of Alpha Strategies at Bitwise, interpreted Trump’s tariffs as a strategy to weaken the dollar and reduce US government bond yields. This scenario could encourage a surge in Bitcoin, prompting investors to look for alternative store-of-value assets. However, not everyone shares this optimistic view.
Geopolitical risks and criticism of Trump’s policies
Analyst Alex Krüger warned of possible economic backlash from a trade war: if new tariffs trigger retaliation from other countries, the US economy could suffer, prompting the Federal Reserve to adopt a more restrictive monetary policy.
Former Treasury Secretary Lawrence Summers has openly criticised Trump’s strategy, calling it economically irrational. In contrast, billionaire hedge fund manager Daniel Loeb pointed out that duties can also be an effective geopolitical tool. In the crypto sector, too, there are mixed opinions: Aave founder Stani Kulechov and Solana co-founder Anatoly Yakovenko see duties as an opportunity to restructure the industry, with cryptocurrencies potentially becoming a hedge against economic turmoil.
Market rebound and future prospects
After the initial slump, the market rebounded strongly yesterday, following the news that new duties on Mexico will be suspended for a month after an agreement between the two governments. Shortly afterwards came the freezing of tariffs on Canada as well, although the possibility of 10% still remains. In addition, Trump is considering further trade restrictions against the European Union.
The volatility in crypto markets looks set to continue in the coming weeks, with investors closely monitoring both US policies and foreign government responses. In this scenario, Bitcoin could once again prove to be a safe haven asset in times of global economic uncertainty. Beyond the initial negative impact that undoubtedly discouraged small and medium-sized crypto investors in particular.
