{"id":53255,"date":"2025-04-02T04:17:30","date_gmt":"2025-04-02T04:17:30","guid":{"rendered":"https:\/\/emilynews.com\/blog\/?p=53255"},"modified":"2025-04-02T04:17:30","modified_gmt":"2025-04-02T04:17:30","slug":"the-impact-of-the-us-led-tariff-war-on-btc-price","status":"publish","type":"post","link":"https:\/\/emilynews.com\/blog\/?p=53255","title":{"rendered":"The impact of the US-led tariff war on BTC price?"},"content":{"rendered":"

The US-led tariff war gets all the blame for Bitcoin\u2019s year-to-date weakness, but there are other factors weighing on BTC price.<\/p>\n

Despite Bitcoin\u2019s 2.2% gains on April 1, BTC hasn\u2019t traded above $89,000 since March 7. Even though the recent price weakness is often linked to the escalating US-led global trade war, several factors had already been weighing on investor sentiment long before President Donald Trump announced the tariffs.<\/p>\n

Some market participants\u00a0claimed\u00a0that Strategy\u2019s $5.25 billion worth of Bitcoin purchases since February is the primary reason BTC has held above the $80,000 support. But, regardless of who has been buying, the reality is that Bitcoin was already showing limited upside before President Trump announced the 10% Chinese import tariffs on Jan. 21.<\/p>\n

\n

Gold\/USD (left) vs. Bitcoin\/USD (right). Source: TradingView \/ Cointelegraph<\/em><\/p>\n<\/figcaption><\/figure>\n

The S&P 500 index hit an all-time high on Feb. 19, exactly 30 days after the trade war began, while Bitcoin had repeatedly failed to hold above $100,000 for the previous three months. Although the trade war certainly affected investor risk appetite, strong evidence suggests Bitcoin’s price weakness started well before President Trump took office on Jan. 20.<\/p>\n

Spot Bitcoin ETFs inflows, strategic Bitcoin reserve expectations and inflationary trends<\/h2>\n

Another data point that weakens the relation with tariffs is the spot Bitcoin\u00a0exchange-traded funds\u00a0(ETFs), which saw $2.75 billion in net inflows during the three weeks following Jan. 21. By Feb. 18, the US had announced plans to impose tariffs on imports from Canada and Mexico, while the European Union and China had already retaliated. In essence, institutional demand for Bitcoin persisted even as the trade war escalated.<\/p>\n

Part of Bitcoin traders\u2019 disappointment after Jan. 21 stems from excessive expectations surrounding President Trump\u2019s\u00a0campaign promise\u00a0of a \u201cstrategic national Bitcoin stockpile,\u201d mentioned at the Bitcoin Conference in July 2024. As investors grew impatient, their frustration peaked when the actual executive order was issued on March 6.<\/p>\n

A key factor behind Bitcoin\u2019s struggle to break above $89,000 is an inflationary trend, reflecting a relatively successful strategy by global central banks. In February, the US Personal Consumption Expenditures (PCE) Price Index rose 2.5% year-over-year, while the eurozone Consumer Price Index (CPI) increased by 2.2% in March.<\/p>\n

Investors turn more risk-averse following weak job market data<\/h2>\n

In the second half of 2022, Bitcoin\u2019s gains were driven by inflation soaring above 5%, suggesting that businesses and families turned to\u00a0cryptocurrency as a hedge\u00a0against monetary debasement. However, if inflation remains relatively under control in 2025, lower interest rates would favor real estate and stock markets more directly than Bitcoin, as reduced financing costs boost those sectors.<\/p>\n

\n

US CPI inflation (left) vs. US 2-year Treasury yield (right). Source: TradingView<\/em><\/p>\n<\/figcaption><\/figure>\n

Related:\u00a0<\/strong><\/em>Coinbase sees worst quarter since FTX collapse amid industry bloodbath<\/strong><\/em><\/p>\n

The weakening job market also dampens traders\u2019 demand for risk-on assets, including Bitcoin. In February, the US Labor Department reported job openings near a four-year low. Similarly, yields on the US 2-year Treasury fell to a six-month low, with investors accepting a modest 3.88% return for the safety of government-backed instruments. This data suggests a rising choice for risk aversion, which is unfavorable for Bitcoin.<\/p>\n

Ultimately, Bitcoin\u2019s price weakness stems from investors’ unrealistic expectations of BTC acquisitions by the US Treasury, declining inflation supporting potential interest rate cuts, and a more risk-averse macroeconomic environment as investors turn to short-term government bonds. While the trade war has had negative effects, Bitcoin was already showing signs of weakness before it began.<\/p>\n

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The US-led tariff war gets all the blame for Bitcoin\u2019s year-to-date weakness, but there are other factors weighing on BTC price. Despite Bitcoin\u2019s 2.2% gains on April 1, BTC hasn\u2019t traded above $89,000 since March … The impact of the US-led tariff war on BTC price?<\/span>Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":53257,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5651,6],"tags":[139,3544,7063,3812,5652,276,10,159,97],"class_list":["post-53255","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptonews","category-information","tag-bitcoin","tag-bitcoin-news","tag-coins-news","tag-cryptonews","tag-emilynews","tag-ethereum","tag-hyip","tag-hyipnews","tag-hyips","exalt-entry"],"yoast_head":"\nThe impact of the US-led tariff war on BTC price? - EmilyNews<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/emilynews.com\/blog\/?p=53255\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The impact of the US-led tariff war on BTC price? - EmilyNews\" \/>\n<meta property=\"og:description\" content=\"The US-led tariff war gets all the blame for Bitcoin\u2019s year-to-date weakness, but there are other factors weighing on BTC price. 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