Bitcoin Price Just Crashed 7% On Trumps Tariff Shock

The Bitcoin price plunged by 7.2%from $88,526 to $82,150within the span of four hours following the reciprocal tariff announcement by US President Donald Trump on Wednesday. The precipitous drop aligns with a broader market rout set off by what has been described as one of the largest tariff packages in modern US history.

Bitcoin Crashes After Trumps Tariff Bombshell

On Wednesday afternoon, markets were jolted by a sweeping set of reciprocal tariffs that President Trump claimed would be levied on 185 countries all at once. The news sent ripples across global finance, with the S&P 500 futures market reportedly shedding $2 trillion of market capitalization in under 15 minutes.

According to The Kobeissi Letter (via X): Reciprocal tariffs are officially HERE: President Trump just announced tariffs on 185 countries AT ONCE, one of the largest tariffs in US history. S&P 500 futures erased -$2 TRILLION of market cap in under 15 minutes.

The initial press coverage noted a 10% baseline tariff. However, as Trump spoke, the schemes complexity and scope became more apparent. He clarified that tariffs would be reciprocal but set to half of whatever rate another country currently imposes on US goodsa figure well beyond the 10% baseline in many cases.

China, for instance, reportedly applies 67% tariffs on certain imports from the United States, suggesting a 34% tariff reciprocally aimed at Chinese imports. Meanwhile, the European Union could face a 20% tariff. This is VASTLY different than a 10% tariff across the board, The Kobeissi Letter pointed out, adding that these significantly higher rates created massive volatility.

At one point in Trumps announcement, the S&P 500 futures reversed from being up 2% to dropping 4%an abrupt 6-percentage-point swing in under 20 minutes. By the time the Make America Wealthy Again Event concluded, the markets had sustained those losses, with Nasdaq 100 futures indicating a potential 500-point decline from prior levels.

Bitcoin, which was up 8.9% since Monday morning, instantly experienced the same turmoil, shedding 7.2% of its value. Julio Moreno, Head of Research at CryptoQuant, remarked via X: I hope Bitcoiners learn that Trumps tariffs are a net negative for Bitcoin and the US economy.

He further elaborated: Trump has introduced too much uncertainty to the world economy with his tariffs. Theres a high enough chance of recession if the tariffs last long enough. This of course has hit Bitcoin and crypto prices in spite of a positive regulatory environment and [the Strategic Bitcoin Reserve].

Economic Projections

While the precise long-term effects remain unclear, several prominent institutions have already issued forecasts.

JPMorgan analysts warn: On a static basis, todays announcement would raise just under $400 billion in revenue, or about 1.3% of GDP, which would be the largest tax increase since the Revenue Act of 1968. We estimate that todays announced measures could boost PCE prices by 11.5% this year This impact alone could take the economy perilously close to slipping into recession. And this is before accounting for the additional hits to gross exports and to investment spending.

Simultaneously, The Kobeissi Letter noted that the average US tariff rateonce the new set of duties is enforcedcould exceed levels not seen since World War II. They cautioned that the White Houses targeted tariff revenue of $600 billion per year may be optimistic, suggesting only half that amount might materialize based on current data. Additional exemptionssuch as copper, pharmaceuticals, semiconductors, and lumberamplified the confusion, indicating that the tariffs will vary widely by sector and country of origin.

UBS, as quoted by The Kobeissi Letter, also raised the alarm about inflation: BREAKING: UBS says a permanent implementation of President Trumps reciprocal tariffs would result in inflation rising to 5%. This would be a result of prices rising to adjust to the higher costs of imports. We are on the verge of 5% inflation and negative GDP growth.

Although President Trump hinted at forthcoming largest tax cuts in American history, markets did not bounce back on that news. He specified that Medicare, Medicaid, and Social Security benefits would be spared from cuts, but investors and analysts appeared more focused on the immediate shock from the tariff package.

At press time, BTC recovered to $83,207.

Text source: NewsBTC

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