Trump's new tariff measures have triggered turmoil in global financial markets, leading to a significant drop in cryptocurrencies

After U.S. President Donald Trump announced comprehensive tariffs on nearly 200 trading partners, global financial markets experienced significant volatility in overnight trading, particularly with the cryptocurrency market facing a sharp decline. Trump's decision raised concerns about escalating global trade tensions, prompting investors to flee risk assets in favor of traditional safe-haven assets like gold.

Trump Announces New Trade Policy

Trump's executive order announced that starting April 5, 2025, all imported products will be subject to a 10% baseline tariff, except for goods that comply with the USMCA (United States-Mexico-Canada Agreement). Tariffs for certain countries will be raised to 49%. Notably, all foreign-made cars will face a 25% tariff. This policy will take effect on April 9, 2025, significantly impacting U.S. trading partners. Trump stated in his announcement, "The trade relationship between the U.S. and its trading partners has become extremely unbalanced, especially in recent years."

Additionally, Trump announced reciprocal tariffs against specific countries deemed to have imposed significant barriers to U.S. products in trade. For example, China will face a comprehensive tariff of 54%, with an additional 34% surcharge being particularly notable. Other countries such as Japan, the European Union, India, and Vietnam will also face tariffs of up to 46%.

Cryptocurrency Market Reacts Sharply

Following Trump's announcement of the tariff policy, the global cryptocurrency market quickly declined. Over the past 24 hours, the overall market dropped by 3.6%. As of the time of writing, the GMCI 30 index fell by 4.6%. According to the BTCC trading platform, Bitcoin's price dropped by 3% after approaching $88,000 earlier today, falling to $82,300.

In the hours following Trump's announcement, altcoins faced even greater impacts. Ethereum fell over 6%, dropping below $1,800, while Solana (SOL) decreased by 6.5% to around $118. Among the top 10 cryptocurrencies by market capitalization, Dogecoin (down 6.2%), XRP (down 5.5%), BNB (down 3.7%), Cardano (down 5.8%), and Tron (down 2%) all experienced varying degrees of decline.

Traditional Stock Market and Gold Market Reaction

Global stock markets reacted similarly, with Dow Jones, Nasdaq, and S&P 500 futures dropping between 2% and 4% in after-hours trading. Leading U.S. stocks, such as Apple (down 7%), Amazon (down 6%), and Nvidia (down 5%), were also hit hard in this market sell-off.

In stark contrast, gold prices reached a historic high during Asian trading hours. Although Bitcoin and other cryptocurrencies are often viewed as "digital gold," recent market fluctuations indicate that cryptocurrencies remain closely tied to changes in global risk appetite. In this environment, investors are turning to traditional safe-haven assets like gold, driving up gold prices.

Conclusion

Trump's announced tariff policy has exacerbated uncertainty in global markets and raised investor concerns about the outbreak of a global trade war, further increasing downward pressure on cryptocurrencies. This policy has had a profound impact on global financial markets, particularly in the cryptocurrency and stock markets. Although Bitcoin has been seen as a safe-haven asset during times of economic uncertainty, its recent performance suggests that cryptocurrencies remain closely linked to broader risk appetite. As global markets become unstable, investors may prefer to shift their funds to more traditional safe-haven assets like gold to navigate future uncertainties.