Author: Benjamin Schiller
Translated by: TechFlow
As the Trump administration announced its tariff policy on "Liberation Day" on Wednesday, many people hold a pessimistic attitude towards the overall economy and cryptocurrency prices. However, analysts suggest there are ample reasons to remain optimistic.
US President Donald Trump signed an executive order in the Oval Office of the White House on March 26, 2025, announcing a 25% tariff on all foreign-manufactured cars
Image source: Win McNamee/Getty Images
More Information:
- Bitcoin prices significantly dropped during the Trump administration, contrary to investors' expectations.
- Economic uncertainty and tariff policies have prompted investors to turn to safer assets like gold, impacting the crypto market.
- Analysts believe tariffs might weaken the US dollar's dominance, potentially benefiting Bitcoin in the long term.
So far, the crypto market's performance during the Trump administration has been far from expectations. Investors had hoped that regulatory reforms and policies like Bitcoin strategic reserves would significantly boost prices, but the result was quite the opposite. Early this year, Bitcoin prices were well above $100,000, but by March, they had mostly fallen to around $85,000.
Cryptocurrency prices have been dragged down by increased correlation with traditional assets like stocks and bonds, which are being impacted by macroeconomic uncertainty. Tariffs—additional fees imposed by the US on imported goods from other countries—have made Wall Street worried about a global economic recession. Crypto investors are moving away from crypto assets, which are seen as relatively high-risk.
"It's all about market 'risk appetite', which is currently continuing to deteriorate, temporarily creating a split between crypto assets and gold. Gold continues to be the preferred 'safe-haven asset'," said Marc Ostwald, Chief Economist and Global Strategist at ADM International Investment Services.
"This is largely driven by central bank foreign reserve managers who are trying to reduce their dollar exposure, which has been a long-standing concern for them."
As the global financial and trade system becomes increasingly fragmented, investors are beginning to seek lower-risk asset alternatives, including alternatives to the US dollar. Currently, this means turning to gold, which has risen 18% so far this year.
However, this situation might change, according to Omid Malekan, an adjunct professor at Columbia Business School and author of "The Story of Blockchain: A Beginner's Guide to a Technology Nobody Understands", who suggests that Bitcoin might soon become the new gold.
"I think the entire future is full of uncertainty, and in some ways even unpredictable, because there are many intersecting factors, and both cryptocurrencies and tariffs are new domains. Some believe crypto is just a tech asset of risk appetite that will be sold off due to tariffs. But Bitcoin is seen as 'digital gold' in some circles, and physical gold is rapidly rising on tariff news. So which outcome will it be?"
In other words, economic uncertainty might prompt investors to turn to Bitcoin just as they have sought gold in recent months.
Another positive signal is that the impact of tariffs on cryptocurrencies might already be "priced in", and the worst might have passed, according to Zach Pandl, Research Director at Grayscale, a leading crypto asset management company.
President Trump is expected to announce the US tariff policy on Wednesday, April 2nd at 4 PM Eastern Time, known as "Liberation Day". He is reportedly set to announce "reciprocal tariffs" against 15 countries that have imposed tariffs on the US, including China, Canada, and Mexico.
Pandl estimates that tariffs have already reduced economic growth by 2% this year. However, "Liberation Day" might alleviate the most severe pain felt by financial markets. "If we see a tough but phased implementation statement on Wednesday, focusing on the 15 countries they seem to have locked in, I expect the market to rebound," Pandl told CoinDesk.
"Once we get past this announcement, the crypto market might refocus on fundamentals, which are very positive."
Pandl noted that announcements like Circle's IPO would not happen unless institutions are confident about the digital asset space and related policies.
Moreover, Pandl—a former macroeconomic analyst at Goldman Sachs—believes tariffs will increase demand for non-dollar currencies.
"I think tariffs will weaken the dollar's dominance, creating space for competitors, including Bitcoin. Prices might drop in the short term. But the first few months of the Trump administration further enhanced my long-term confidence in Bitcoin as a global monetary asset."
Despite the current market's pessimistic view on prices, Pandl still believes Bitcoin will set a new historical high this year. "If I didn't believe Bitcoin would be a long-term winner, I wouldn't have quit my Wall Street job," he said.
