As Trump’s sweeping tariff announcements rocked global markets, the cryptocurrency world found itself caught in a brutal downward spiral. The so-called “Liberation Day” tariffs targeting 15 countries triggered a massive sell-off, sending Bitcoin plummeting from $88,000 to $83,000 in what analysts are calling a textbook panic response. No surprise there.
The carnage wasn’t limited to Bitcoin. Ethereum got absolutely hammered, trading around $1,863—lows not seen since November 2023. Tough times for crypto bros. The total damage? A staggering $509 million wiped out faster than you can say “trade war.” Altcoins, with their tighter correlation to tech stocks, took an even bigger beating.
It’s not rocket science. Tariffs mean inflation fears. Inflation fears mean economic anxiety. And economic anxiety means investors dump risky assets. Bitcoin’s been trying to hold resistance between $87,000 and $92,000, but it’s been a losing battle since hitting nearly $110,000 earlier in 2025. The Fear and Greed Index has plunged into extreme fear territory, further accelerating the selloff. Economic growth is expected to slow by 2% next year. Not great.
Tariffs trigger the domino effect: inflation fears lead straight to crypto carnage as Bitcoin struggles to hold ground.
The aftershocks hit crypto-linked stocks hard. Coinbase dropped 6%, MicroStrategy tanked 7%, and Robinhood plunged 9%. The Nasdaq ETF fell 4% in after-hours trading. Trump made his market-rattling announcement from the White House Rose Garden. When tech sneezes, crypto catches pneumonia.
Yet some analysts remain oddly optimistic. They’re pushing the narrative that Bitcoin could actually benefit from economic stagflation as a hedge against inflation. Sure, whatever helps them sleep at night. They’re also claiming the tariffs might weaken the dollar, boosting Bitcoin’s appeal as a global monetary asset. With 580 million crypto users worldwide as of January 2024, the impact of these tariffs reaches far beyond American borders.
Institutional investors aren’t abandoning ship entirely. Circle’s IPO is moving forward despite the bloodbath. The big money still sees potential, even as retail investors panic.
Bitcoin’s correlation with NASDAQ has dropped to 40%, down from historical highs. That decoupling might be crypto’s saving grace. If the tariff-induced economic chaos continues, Bitcoin’s “digital gold” narrative might just get its ultimate test. Stay tuned. This rollercoaster’s just getting started.
