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The Bitcoin price plunged by 7.2%—from $88,526 to $82,150—within the span of four hours following the reciprocal tariff announcement by US President Donald Trump on Wednesday. This precipitous fall is in line with the broader market turmoil caused by one of largest tariff packages ever announced in US history.
Bitcoin crashes after Trump’s Tariff Bombshell
The markets shook on Wednesday afternoon by the “reciprocal tariffsThe President Trump said that 185 nations would face a tax. “all at once.” The news sent ripples across global finance, with the S&P 500 futures market reportedly shedding $2 trillion of market capitalization in under 15 minutes.
According To The Kobeissi letter (via X). “Reciprocal tariffs are officially HERE: President Trump just announced tariffs on 185 countries AT ONCE, one of the largest tariffs in US history. S&P 500 futures erased -$2 TRILLION of market cap in under 15 minutes. “
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Initial press reports noted that the tariff was 10%. As Trump talked, however, it became clearer how complex and wide-ranging the plan was. The president clarified that the tariffs will be increased. “reciprocal” but set to half of whatever rate another country currently imposes on US goods—a figure well beyond the 10% baseline in many cases.
China, for example, is said to apply 67% tariffs against certain US imports, implying a reciprocal 34% tariff targeted at Chinese imports. While the European Union might face a 20 percent tariff. “This is VASTLY different than a 10% tariff across the board,” Kobeissi Letter noted that these rates were significantly higher. created massive volatility.
At one point in Trump’s announcement, the S&P 500 futures reversed from being up 2% to dropping 4%—an abrupt 6-percentage-point swing in under 20 minutes. When the announcement was made, the S&P futures were down 4%. This is a sudden 6-percentage point swing that took place in under 20 minutes. “Make America Wealthy Again Event” As a result, markets have sustained these losses. Nasdaq100 futures indicate a 500-point potential decline from the prior levels.
Bitcoin lost 7.2%, after a rise of 8.9% from Monday to Tuesday. Julio Moreno is the Head of Research for CryptoQuant. remarked Via X “I hope Bitcoiners learn that Trump’s tariffs are a net negative for Bitcoin and the US economy.”
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Further details: “Trump has introduced too much uncertainty to the world economy with his tariffs. There’s a high enough chance of recession if the tariffs last long enough. This of course has hit Bitcoin and crypto prices in spite of a positive regulatory environment and [the Strategic Bitcoin Reserve].”
Economic Forecasts
Several prominent institutions already have forecasts, even though the exact long-term impacts are still unclear.
JPMorgan Analysts warn: “On a static basis, today’s announcement would raise just under $400 billion in revenue, or about 1.3% of GDP, which would be the largest tax increase since the Revenue Act of 1968. We estimate that today’s announced measures could boost PCE prices by 1–1.5% this year… This impact alone could take the economy perilously close to slipping into recession. And this is before accounting for the additional hits to gross exports and to investment spending.”
Simultaneously, The Kobeissi Letter noted that the average US tariff rate—once the new set of duties is enforced—could exceed levels not seen since World War II. According to them, the White House’s target of $600 Billion in annual tariff revenues may be too optimistic. Only half of that figure is likely to materialize given current statistics. Additional exemptions—such as copper, pharmaceuticals, semiconductors, and lumber—amplified the confusion, indicating that the tariffs will vary widely by sector and country of origin.
UBS as quoted in The Kobeissi Letter raised The alarming rise in inflation “BREAKING: UBS says a permanent implementation of President Trump’s reciprocal tariffs would result in inflation rising to 5%. This would be a result of prices rising to ‘adjust to the higher costs of imports.’ We are on the verge of 5% inflation and negative GDP growth.”
While President Trump has made a few hints about the future “largest tax cuts in American history,” Markets did not react well to the news. Investors and analysts seemed more concerned with the initial shock of the tariff package.
BTC had recovered $83,207 at the time of publication.
Featured Image created using DALL.E and chart from TradingView.com
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Source: www.newsbtc.com
