Trump’s protectionist policies contributed to Bitcoin’s decline below $80,000
The trade war between the US and China led to a significant impact on the value of Bitcoin
The cryptocurrency market experienced significant volatility due to the tariffs and trade war
The Tariff Turbulence: How Trump’s Return Led to a Wild Ride for Bitcoin
When Donald Trump returned to the White House for a second term, the crypto community welcomed the news with open arms. The market rallied, with Bitcoin (BTC) soaring to new heights, breaching the $90,000 mark. However, this euphoria was short-lived. The introduction of hefty tariffs by the Trump administration on Chinese goods and the subsequent retaliatory measures taken by Beijing sent shockwaves through the global economy. As the trade war escalated, Bitcoin, once again, found itself caught in the crossfire, ultimately plunging below $80,000.
In this article, we’ll explore the timeline of events that led to this dramatic decline, highlighting the key moments when Trump’s tariffs and global retaliation had a significant impact on the value of Bitcoin.
Week 1 (January 2021): The Rally Continues
Following Trump’s inauguration, the crypto market continued its upward trajectory. With institutional investors increasingly allocating a significant portion of their portfolios to cryptocurrencies, the demand for Bitcoins surged. The price reached an all-time high of $91,445 on January 23, with many predicting that this was just the beginning of the bull run.
Week 2-3 (January-February 2021): Tariffs on China
In early February, Trump’s administration announced its intention to impose a 15% tariff on over $200 billion worth of Chinese goods. This move was met with swift retaliation from Beijing, which slapped tariffs on $110 billion worth of US goods. The global economy began to feel the pinch, with trade tensions escalating further.
As the trade war intensified, investors began to reassess their risk tolerance. The cryptocurrency market, which had been booming just a few months prior, started to correct. Bitcoin’s price plummeted by over 15%, with other major cryptocurrencies such as Ethereum and Litecoin experiencing similar declines.
Week 6-7 (March-April 2021): Global Economic Uncertainty
The trade war continued to escalate, with both sides imposing additional tariffs. The global economy began to feel the impact, with many economists warning of a potential recession. Amidst this uncertainty, investors turned risk-averse, pouring into safer assets such as bonds and gold. Bitcoin, once again, felt the pressure, its value dropping below $80,000.
Week 8-9 (April-May 2021): Regulatory Concerns and Market Volatility
As the trade war raged on, regulatory concerns began to swirl around cryptocurrencies. The US Federal Reserve, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission all issued statements cautioning investors about the risks associated with Bitcoin and other digital assets. Market volatility increased, with Bitcoin’s value experiencing wild swings, leading many investors to reassess their risk tolerance.
Week 10-11 (May-June 2021): TradeTalks and Market Calm
In late May, the US and China announced a temporary truce, agreeing to hold trade talks. The news provided a semblance of calm to the global economy, with Bitcoin’s value stabilizing. Although the cryptocurrency market was still reeling from the tariffs and trade war, investors began to regain confidence in the asset class.
The timeline of events outlined above highlights the impact of Trump’s tariffs and global retaliation on the value of Bitcoin. As the trade war escalated, the cryptocurrency market experienced significant volatility, with many investors reassessing their risk tolerance. While the price of Bitcoin ultimately plumbed below $80,000, the asset class has shown remarkable resilience in the face of adversity. Looking ahead, it’s clear that regulatory clarity, global economic stability, and investor confidence will play a crucial role in determining the future of Bitcoin’s value.
