Key Points
- Bitcoin’s market value has dropped by 8.29% due to Trump’s tariffs on major import partners.
- The year 2025 is anticipated to be a significant test for Bitcoin’s “safe haven” status.
Bitcoin’s market value has witnessed a significant drop, losing trillions within a week. This is attributed to the high-stake tariffs imposed by Trump on three of its most significant import partners.
The question of whether risky assets will withstand this pressure or if traditional finance will reclaim its safe-haven status remains. Trump’s bold policies, less than twenty days into office, have already shaken the Bitcoin (BTC) market, erasing 8.29% of its value.
Impact of Trade War on Crypto Market
The impact of the ongoing U.S.-China trade war is hitting hard, with Bitcoin losing over 6% of its market share. This has resulted in the wiping of trillions of dollars. Meanwhile, Gold (XAU) has surged over 3% weekly, reaching a new all-time high of over $2,880 per ounce.
The U.S. dollar index has also soared above 109 due to the 10% tariff on Chinese imports. This has led to investors moving into bonds for safer returns due to fears of an interest rate hike.
Bitcoin’s Potential to Withstand Pressure
During Trump’s first term as President, the U.S.-China trade war escalated significantly. This led to a major hit on Bitcoin, which dropped by 72% and closed the year at $3,740 in 2018.
However, U.S. imports from China have reduced by 8 percentage points since then, now accounting for just 13.5% of total imports. Furthermore, Bitcoin’s status as a “safe haven” has consistently gained momentum over the past seven years.
Even though Bitcoin still lags behind Gold in terms of market cap and investor trust, a double-digit loss seems unlikely at this stage. Despite the increased “risk” of investing in crypto assets, institutional capital is expected to absorb the pressure.
Monitoring the U.S. economic calendar has become more crucial than ever due to these developments.
