Market Update: Trump's import tariffs push crypto into a dive

The panic across global financial markets from Trump's hardline trade measures is now obvious in the crypto market.

The panic across global financial markets from Trump's hardline trade measures is now obvious in the crypto market.

This past weekend, the 10 percent base import tariffs on all American imports went into effect. On Wednesday, April 9, additional reciprocal tariffs will follow for countries that announced countermeasures.

One of those countries is China. Trump had announced total import tariffs of 34 percent on the country. Beijing responded immediately with tariffs of 34 percent as well, which go into effect on April 10 and apply to all American imported goods.

Other countries, such as Indonesia and Taiwan, also hit hard by tariffs, have opted not to retaliate.

Financial markets reacted sharply to Trump's announcements. From Wednesday to Friday, we saw sizable selloffs: the S&P 500 fell 12 percent, and the tech index NASDAQ dropped 15 percent. Further corrections aren’t ruled out. A telltale sign: the Chinese stock index Hang Seng opened down nearly 13 percent.

Crypto markets also showed a pronounced drop, even though Bitcoin, Ripple, and Ethereum had previously displayed more resilience than many traditional assets.

Since Sunday, Bitcoin has fallen 8 percent. Since Wednesday, the total drop is nearly 16 percent. At press time, Bitcoin sits at $74,751, about $5,000 above the pre-spike level from November, when Donald Trump won the U.S. presidential election.

While Bitcoin’s price action has largely tracked traditional markets, altcoins look much weaker. Ethereum (ETH) fell 19 percent in the last 24 hours, as did Solana (SOL) and Cardano (ADA). The biggest losers among the top 10 are Dogecoin (DOGE) with a 20 percent drop and Ripple (XRP) down almost 22 percent.

In crypto futures markets, about $1.3 billion worth of positions were liquidated in the last 24 hours. The vast majority were long positions—bets on higher prices—worth $1.15 billion.

Meanwhile, remarks from U.S. Commerce Secretary Howard Lutnick added more uncertainty. Asked how long the tariffs would stay in place, he said: “There will be no delay. The base 10 percent tariffs stay in place for days, possibly weeks.”

More financial institutions are adjusting their expectations for a U.S. recession. Last week Goldman Sachs raised the likelihood of an economic downturn to 30%. JPMorgan now sees a 60% chance.