As the Trump administration announced its tariff policy on “Liberation Day” on Wednesday, many were pessimistic about the overall economy and cryptocurrency prices. However, analysts say there are many reasons to remain optimistic.
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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-made cars.
- Bitcoin prices have fallen significantly during the Trump administration, contrary to investors' expectations.
- Economic instability and tariff policies have caused investors to move to safer assets like gold, affecting the cryptocurrency market.
- Analysts believe that tariffs could weaken the dominance of the US dollar, which could benefit Bitcoin in the long term.
So far, the performance of the cryptocurrency market under the Trump administration has been disappointing. Investors had hoped that regulatory and policy reforms like the Bitcoin Strategic Reserve would boost prices significantly, but the results have been quite the opposite. Bitcoin's price topped $100,000 earlier this year, but by March, it had largely fallen to around $85,000.
Cryptocurrency prices have been dragged down by their growing correlation with traditional assets like stocks and bonds, which have been hit by macroeconomic uncertainty. Tariffs—additional fees the U.S. imposes on goods imported from other countries—have raised concerns on Wall Street about a global recession. Cryptocurrency investors are fleeing Cryptoasset, which are XEM as relatively high-risk.
“It all depends on the market’s ‘risk appetite’, which continues to deteriorate, temporarily creating a divergence between Cryptoasset and gold. Gold remains 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 exchange reserve managers who are trying to reduce their dependence on the dollar, which has long been a concern for them.”
As the global financial and trade systems become increasingly Shard, investors are starting to look for lower-risk asset options, including alternatives to the US dollar. Currently, that means turning to gold, which has gained 18% YTD.
However, that could 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 believes Bitcoin could soon become “the new gold.”
“I think the whole future is uncertain, and in some ways even impossible to predict, because there are so many factors that intersect, and both crypto and tariffs are new areas. Some believe that crypto is just a risk-on tech asset and will be sold off due to tariffs. But Bitcoin is XEM as ‘digital gold’ in some circles, and physical gold is rallying on the tariff news. So what will be the outcome?”
In other words, economic uncertainty could drive investors to Bitcoin just as they have turned to gold in recent months.
Another positive sign is that the impact of tariffs on crypto may have already been “priced in” to the market, and the worst may be over, according to Zach Pandl, Director of Research at Grayscale, a leading Cryptoasset management firm.
President Trump is expected to announce the US tariff policy on Wednesday, April 2 at 4 p.m. ET, known as “Liberation Day.” He is expected to announce “retaliatory tariffs” against 15 countries that have imposed tariffs on the US, including China, Canada and Mexico.
Pandl estimates that the tariffs have already reduced economic growth by 2% this year. But “Liberation Day” could alleviate the most severe pain financial markets are feeling. “If we see a tough but phased rollout announcement on Wednesday, focusing on the 15 countries they seem to have identified, I would expect markets to rally,” Pandl told CoinDesk.
“Once we get past this announcement, the crypto market can refocus on fundamentals, which are very positive.”
Pandl noted that announcements like Circle ’s IPO won’t happen unless institutions are confident about the digital asset space and related policies.
Furthermore, Pandl—a former macroeconomic analyst at Goldman Sachs—believes that tariffs will increase demand for non-dollar currencies.
“I think tariffs will weaken the dollar’s dominance, creating space for competitors, including Bitcoin. Prices may fall in the short term. But the first few months of the Trump administration have only reinforced my long-term belief in Bitcoin as a global monetary asset.”
Despite the current bearish market sentiment, Pandl still believes Bitcoin will hit new all-time highs this year. “If I didn’t believe Bitcoin would be a long-term winner, I wouldn’t have quit my job on Wall Street,” he said.
