U.S. Tariffs Rattle Bitcoin — Sharp Swings, Sinking Markets, and What Comes Next

The crypto world recoiled after the U.S. imposed new trade tariffs on all nations. Bitcoin reacted with typical volatility: a surge to $88,000 followed by a steep fall to $82,000. At present, BTC trades around $83,000.

The correlation was uncanny. The S&P 500 slipped by 2–3%, losing more than $2 trillion in market cap—dragging risk assets like Bitcoin with it.

While the new U.S. tariff schedule sets a standard 10% rate, most countries face case-by-case adjustments—many substantially higher. China, for example, is now hit with a 54% cumulative duty, including a pre-existing 20%.

It’s a textbook setup for a market downturn. Higher prices, reduced margins, and slower growth loom on the horizon. As uncertainty spreads, investors are trimming their exposure to volatile sectors—dumping crypto and equities in favor of safety.

Check this out: Scott Bessent on Market Swings: “Corrections Are a Natural Process”

• Sentiment soured sharply, with the Fear and Greed Index sliding to 24—the lower bound of the fear zone.
• The Altseason Index dropped to 14, further signaling Bitcoin’s stronghold on market momentum.
• Bitcoin dominance remains firm at 62%, despite scattered rebounds across select altcoins post-dip.

Institutions Playing Mind Games Again

April 2 marked a sharp institutional rebound. U.S. spot Bitcoin ETFs logged $218.1 million in net inflows—erasing prior losses and posting their strongest daily performance in weeks.

Yet the market’s largest product, BlackRock’s IBIT, broke ranks with a $115.9 million net outflow—its first notable drawdown after weeks of stability.

Global Markets Brace for Countermoves

Following Washington’s announcement of sweeping tariffs, the question now haunting investors: who retaliates, and when?

Scott Bessent, Treasury Secretary, called for a diplomatic pause, urging affected countries to maintain existing trade conditions for the sake of financial stability.

I think the market could have certainty that this is the number barring retaliation,

Bessent warned in a briefing.

European Commission chief Ursula von der Leyen described the newly announced U.S. tariffs as a grave threat to the world economy and confirmed that the European Union is preparing a response.

Although Europe has consistently advocated for open trade negotiations, she stressed that the latest move from Washington undermines global cooperation and will disproportionately hurt everyday citizens.

Across the Pacific, South Korea, Japan, and China have begun aligning their positions, pledging a coordinated response to the White House’s deepening trade restrictions. 

Retaliation seems inevitable, and if the U.S. leans harder into its tariff policy, crypto’s calm may crack fast. Bitcoin won’t be spared—the digital asset space could see another round of wild swings and sharp pullbacks.

Read on: What Are Trump’s Tariffs: A New Blow to the Economy?

Should escalation follow, Bitcoin and the broader crypto market could face another bout of volatility and correction. In this climate of uncertainty—still reeling from the initial shock—analysts recommend steering clear of aggressive trades and cutting back on leverage to avoid cascade liquidations.