Trump’s Tariff Tango Threatens Crypto Chaos! 🤹‍♂️💰

by

Ever since the Great Mustachioed Magnate, Donald Trump, waltzed into the Oval Office, his big, bold, and rather bossy tariff tantrums have thrown global stocks and crypto markets into a splendid spin. China, Canada, and Brazil, those cheeky chaps, are not about to bend a knee to the Tariff Titan. Crypto experts, with their mysterious crystal balls, foresee a market mauling of epic proportions this week.

From stock swaps to crypto capers, everyone’s eyes are glued to “Liberation Day,” a most curious carnival on April 2, when President Trump is expected to unveil a staggering 20% tariff on over 25 countries as a so-called “reciprocal tariff.” This tariff tango will twist the fate of $1.5 trillion worth of imports by April 2025. Good grief, that’s a hefty heap of hooey!

It’s officially “reciprocal tariff” week:

President Trump has called Wednesday “Liberation Day” with 20%+ tariffs coming on up to 25+ countries.

US tariffs will impact $1.5+ TRILLION worth of imports by the end of April.

Here’s what you need to know.

(a thread)

— The Kobeissi Letter (@KobeissiLetter) March 30, 2025

Now, let’s talk shop, shall we? Reciprocal tariffs, those curious creatures, are a sort of trade truce where countries agree to be chummy and share the spoils of trade duties. Tariffs, on the other hand, are those pesky taxes on imported goods that can make your wallet wince and your goods go up in price.

When tariff tantrums turn up the heat, inflation tends to rise, and investors start to look like scaredy-cats. They shy away from risky rides like cryptocurrencies and stocks, preferring the safer shores of fixed deposits, bonds, and the like. This, my dear reader, leads to market mayhem.

History repeats itself, you see. During Trump’s first term, the U.S.-China trade war in 2018 made Bitcoin do a nosedive of about 27%, as folks ran to the safety of the U.S. dollar. Last week, the crypto market lost over $130 billion, with Bitcoin (BTC) dipping by 6%, Ethereum (ETH) by 11%, XRP by 15%, and Solana by 10.1%. Oh, what a tango of turmoil!

Tariff Tango Could Lead to a Market Maelstrom

Trump’s tariff twirls could spark a global trade tempest, as history shows countries have a knack for retaliating. The U.S. average tariff rate is already close to 8%, the highest since 1970. Experts predict it will soar past the 1946 record by April. This could spell disaster, making goods pricier and stirring up stormy trade tensions.

According to a Tax Foundation report, when tariffs raise prices, they dampen economic growth, reduce the availability of goods and services, and lead to job cuts. Not a pretty picture, I must say.

Economy Policy Uncertainty Index by The Kobeissi Letter

Policy uncertainty is at an all-time high, 80% higher than in 2008. This is a major reason for the market’s merry-go-round of volatility. Tariff hikes can disrupt global supply chains, making investors flee to traditional safe havens.

What’s the Long-term Impact on Crypto?

The long-term forecast for crypto markets might be sunnier. Despite the short-term panic, Trump’s administration has shown a pro-crypto stance. In January 2025, plans for a national cryptocurrency stockpile were announced. So, while the immediate future looks stormy, the long-term outlook is bullish, thanks to regulatory clarity, Trump’s crypto-friendly policies, and the U.S. Strategic Crypto Reserve.

Final Thoughts

The immediate impact of Trump’s tariff tantrums on the crypto market is likely to be negative, with market uncertainty causing significant volatility and value loss. However, the long-term outlook may be more optimistic. While short-term turbulence is inevitable, these policies might eventually create a more favorable environment for cryptocurrency growth.

Read More

2025-04-01 09:58