Bitcoin’s recent price swings have been driven by the Trump administration’s latest wave of tariffs, as concerns over rising inflation and global trade tensions ripple through financial markets.
The cryptocurrency briefly fell to a four-month low below $77,000 before rebounding above $82,000, according to Kraken. This volatility highlights Bitcoin’s sensitivity to macroeconomic uncertainty, which has been exacerbated by former President Donald Trump’s renewed trade war.
Larry Fink Warns of Prolonged Inflation
BlackRock CEO Larry Fink weighed in on the economic impact of rising protectionism, suggesting that nationalism-driven policies could contribute to sustained inflation.
“If we all are becoming a little more nationalistic—and I’m not saying that’s a bad thing—it’s going to have elevated inflation,” Fink said at a Houston conference.
His comments added to market unease, as investors assess the broader consequences of Trump’s trade policies.
Crypto Market Reacts to Political Turmoil
The crypto community has responded sharply to the escalating trade tensions.
“The crypto market didn’t just bleed $1 trillion because of inflation jitters,” said Mike Cahill, CEO of Douro Labs. “What we’re seeing is a full-blown reaction to political chaos and global tensions stemming from Trump’s tariffs. Investors are selling off because the macro environment feels like a never-ending rollercoaster.”
Ben Brauser, author of Crypto Moments: How Tech Visionaries Disrupted Global Finance, echoed this sentiment: “The ongoing tariff war is creating uncertainty in global markets. No country is immune to potential economic disruption, and investors are de-risking to weather the storm.”
Wall Street Braces for Economic Slowdown
The trade war’s economic fallout is prompting renewed warnings from major financial institutions.
Morgan Stanley predicts the S&P 500 could drop another 5% if tariffs escalate.
Goldman Sachs has raised its recession probability to 20% and downgraded its 2025 GDP growth forecast to 1.7% from last year’s 2.8%, citing worsening trade policies.
Yardeni Research increased its recession risk estimate to 35%, stating that “Trump 2.0’s barrage of executive orders, firings, and tariffs have rattled investors, shaken confidence in the economy, and inflamed inflation fears.”
Investor Sentiment Deteriorates
Market anxiety is rising, reflected in CoinMarketCap’s Fear and Greed Index, which dropped to “extreme greed” this week—often a signal of heightened sell pressure.
“The potential consequences of a recession have definitely increased,” said Bart de Bruijn, co-founder of EstateX. “The worldwide economic sentiment is one of fear.”
As Bitcoin remains highly reactive to macroeconomic shifts, investors are bracing for further turbulence in both traditional and crypto markets.
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