In his initial months as president, Donald Trump has stirred trade tensions by imposing tariffs on key trading partners like Canada, Mexico, and China, leading to volatility in US and global markets, including crypto. As of March 8, some tariffs were rescinded, adding to the unpredictable nature of US trade policies that affect market sentiment. QCP Capital noted that the crypto market remains closely tied to equities, with turmoil reflecting broader economic shifts. Bitcoin, often seen as a high-risk asset, has faced significant price corrections from a peak of $108,786 post-election to below $80,000 in March. Despite a pro-crypto stance from the administration and record flows into Bitcoin Spot ETFs exceeding $10 billion, concerns around tariffs have dampened investor sentiment, resulting in ETF outflows. Some traders believe tariffs are a short-term distraction, with the real market driver being Trump’s policies impacting fiscal conditions. Overall, while tariffs might introduce temporary fear, the underlying dynamics of fiscal austerity could have a more lasting influence on crypto markets.

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