Global markets shuddered Thursday as President Donald Trump escalated trade war rhetoric, threatening “far larger” tariffs on the EU and Canada.
Cryptocurrencies reeled, with XRP dropping 2% and Solana (SOL) mirroring the decline. But Bitcoin held steady near $87,500, defying immediate panic. Analysts warn the volatility reflects growing fears of economic upheaval and crypto’s fragile dance with traditional markets.
Trump Doubles Down on Trade War Threats
Trump reignited trade tensions early Thursday, vowing to slap aggressive tariffs on EU and Canadian goods if they “collude” against U.S. interests. “Liberation day in America is coming,” he declared on Truth Social, accusing allies of exploiting U.S. trade policies. His warnings followed recent 25% tariffs on Canadian and Mexican imports and 20% levies on Chinese goods, justified by national security concerns.
The move stunned markets already grappling with inflation risks. Tariffs typically hike import costs, fuel price surges, and pressure central banks to raise rates, a recipe for market turbulence. This will be followed by risk-sensitive assets like crypto facing headwinds as investors eye safer havens.
Crypto Markets Fall But Some Tokens Broke The Trend
XRP and SOL led losses, each shedding 2% within hours of Trump’s post. Dogecoin (DOGE) briefly jumped 3.5% before paring gains, while Bitcoin hovered near $87,500 despite a 0.6% dip.
Not all tokens fell. Sui Network’s SUI surged 7% ahead of its Walrus Network launch, a data protocol debuting Thursday. “Niche projects with clear use cases may thrive despite macro-chaos,” one trader noted.
Asia Emerges as a Crypto Lifeline
While U.S. tensions dominate headlines, analysts point to Asia for potential relief. Jupiter Zheng of HashKey Capital highlighted the region’s pro-crypto regulations and institutional innovations. “Asia could anchor the next bull run,” he told, citing new funds and products rolling out in Hong Kong and Singapore.
Still, Bitcoin’s resilience amid stock market drops hints at decoupling hopes. BTSE’s Jeff Mei argued, “Crypto’s worst may be over if inflation fears ease and rate cuts near.” Still, skeptics warn Trump’s tariffs could strengthen the dollar, further pressuring Bitcoin.
Regulatory Moves Add to Market Whiplash
U.S. lawmakers added another layer of drama, unveiling a bill to curb stablecoin risks. At the same time, Ethereum’s final Pectra test went live, advancing blockchain scalability. However, eyes remain glued to Washington: The Senate Banking Committee will grill SEC nominee Paul Atkins, who holds up to $6 million in crypto assets.
The regulatory shuffle coincides with Friday’s $15 billion BTC and ETH options expiry, an event that could trigger volatility. “Traders are hedging bets ahead of the deadline,” one analyst said.
PCE Report Takes Center Stage
All roads lead to March 28’s Personal Consumption Expenditures (PCE) data, the Fed’s preferred inflation gauge. A hot reading could delay rate cuts, spooking crypto and stocks alike. Conversely, softer numbers might revive bullish momentum.
“The PCE report will dictate short-term market psychology,” warned a derivatives trader. Bitcoin’s stagnant price action suggests caution, though some speculate institutional players like GameStop’s recent $1.3 billion crypto bet could offset retail fears.
What’s Next for Crypto?
Trump’s tariff tantrum underscores crypto’s vulnerability to geopolitical shocks. Yet Asia’s regulatory strides and Bitcoin’s stubborn stability hint at underlying resilience. For now, traders brace for a stormy week dominated by macro data, options expiry, and regulatory crossfires.
As one investor put it: “Crypto’s survival hinges on navigating chaos, something it’s done before.” Whether that streak continues hinges on Washington’s next move.
