- The United States will implement reciprocal tariffs on international trade partners, calculated at half of each country’s respective rates.
- The standard tariffs are set at 10% on all imports and 25% on vehicles manufactured abroad.
- Following the tariff announcement, Bitcoin and several leading cryptocurrencies such as Ethereum, Solana, and XRP experienced significant downturns.
Bitcoin (BTC) and the broader cryptocurrency market underwent a swift correction on Wednesday following President Donald Trump’s announcement regarding reciprocal tariffs, which are based on half of each country’s rates. The tariffs include a standard 10% on imports and 25% on foreign-made cars.
After the declaration, Bitcoin experienced a 2% drop, while Ethereum (ETH), XRP, and Solana (SOL) recorded declines of 4%, 3%, and 4%, respectively, according to FXStreet’s asset prices.
Bitcoin and crypto platforms react sharply as Trump tariffs trigger market volatility
During the “Make America Wealthy Again” event at the White House on Wednesday, President Trump announced global reciprocal tariffs ranging from 10% to 50%, with Canada and Mexico being exempt from these tariffs.
This initiative will impact 185 countries, marking it as one of the largest tariff implementations in US history. The tariffs will amount to 50% of the rates that a country imposes on the United States, alongside a baseline of 10% for countries not included in the 185 listed.
Tariffs on cars are scheduled to take effect on Thursday, with baseline tariffs starting on Saturday, while the reciprocal tariffs are set to begin on April 9.
The tariff announcement resulted in significant declines within top cryptocurrencies, leading to a 5% drop in total crypto market capitalization.
At the time of reporting, Bitcoin slid 2%, approaching $83,000. Other major altcoins, including Ethereum, XRP, and Solana, also recorded sharp decreases of 4%, 3%, and 4%, respectively.
This downturn has resulted in a surge in crypto futures liquidations, totaling $511.77 million within the last 24 hours, according to Coinglass. Bitcoin traders accounted for the largest portion of liquidations, amounting to $179.71 million. The drop in cryptocurrency values highlights a broader risk-off attitude prevalent in the financial markets.
“The initial market ‘shock’ may likely increase volatility, but this is expected to be a temporary effect. The durability of these changes will largely depend on how swiftly the market adapts,” Arthur Azizov, Founder of B2 Ventures, shared with FXStreet.
The traditional stock market also witnessed sharp declines following the tariff announcement, with the S&P 500 plummeting 3.7%, resulting in a $2 trillion loss in market capitalization.
In a Wednesday interview on Bloomberg TV, US Treasury Secretary Scott Bessent commented on the significant downturns in US stocks, suggesting that “the Nasdaq peaked on DeepSeek day, so that’s a Mag 7 issue, not a MAGA issue.”
Various other cryptocurrency categories faced declines as well, including sectors related to Artificial Intelligence, Memes, Real-world assets (RWA), and DePIN, which dropped by 4%, 3%, 4%, and 2%, respectively.
Frequently Asked Questions about Bitcoin, Altcoins, and Stablecoins
Bitcoin is the largest cryptocurrency by market capitalization, functioning as a digital currency intended for monetary transactions. This currency is not governed by any singular individual, group, or organization, thus negating the necessity for intermediary involvement in financial transactions.
Altcoins refer to any cryptocurrency other than Bitcoin. However, Ethereum is sometimes classified separately, as it is from these two that most forks occur. If this is considered accurate, then Litecoin is regarded as the first altcoin, forked from the Bitcoin protocol, thus seen as an “enhanced” version.
Stablecoins are cryptocurrencies designed to maintain stable pricing, with their value supported by a reserve of the underlying asset. To achieve this stability, the value of a stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated algorithmically or based on demand. The primary aim of stablecoins is to facilitate an on/off ramp for investors trading and investing in cryptocurrencies, as well as to provide a means to preserve value in an otherwise volatile market.
Bitcoin dominance refers to the ratio of Bitcoin’s market capitalization relative to the total market capitalization of all cryptocurrencies combined. This metric provides insight into Bitcoin’s popularity among investors. A high Bitcoin dominance often occurs before and during a bull market, as investors tend to favor the more stable and larger market capitalization asset like Bitcoin. Conversely, a decline in Bitcoin dominance typically indicates that investors are reallocating capital and/or profits into altcoins in search of higher returns, often triggering an altcoin surge.
