Crypto and the Trade War

“It’s already working. Hang tough. We can’t lose!!!” - Donald J. Trump, April 4, 2025

That’s one view.

Another view is this:

That’s the crypto marketcap plunging down over the last 7 days. It’s not just crypto that is down btw, stocks are down bad too. It’s clear we’re in the early stages of a seismic economic disruption.

Markets are reeling. Tariffs are flying. And crypto? It’s caught in the crossfire.

Crypto Market Snapshot (as of April 8, 2025)

• Bitcoin (BTC): $78,797 ↓ from $109,000 (Feb 2025 peak)

• Ethereum (ETH): $1,565 ↓ from $4,100

• Solana (SOL): $107 ↓ from $180

Coinbase is down 7.7%, MicroStrategy slipped 5.6%, and mining stocks like MARA and RIOT are down over 8%. Risk-off mode has taken hold.

The Tariff Wars: WTF is Going On?

Let’s unpack this properly.

To understand why crypto is suffering, you first need to understand why tariffs matter, and how they’ve been weaponized like never before.

At its core, a tariff is a tax that a government places on imported goods. But beyond that, it's:

1. A price manipulator: It makes foreign goods more expensive than domestic ones.

2. A policy weapon: Used to punish or pressure foreign governments.

3. A distortion agent: Reshapes what gets produced, where capital flows, and how global supply chains are structured.

For example, iIf Apple imports a $1,000 iPhone assembled in China and the US slaps a 34% tariff on it, the base cost becomes $1,340. Apple either raises prices (hurting consumers) or eats the cost (hurting margins).

How Are Trump’s New Tariffs Different?

Trump’s latest round, unveiled on April 2 (he dubbed it “Liberation Day”), imposes:

10% base tariff on all imports. Steeper tariffs based on trade deficits, not fairness or reciprocity:

• 34% on China

• 25% on South Korea

• 24% on Japan

• 20% on the EU

• 46–49% on Cambodia, Vietnam, and other low-cost exporters

These rates are not based on what other countries charge the US. Instead, they’re designed to mathematically eliminate the trade deficit. 

If the US buys $100B more from a country than it sells to it, Trump’s team slaps on a tariff big enough to close that gap (in theory). No adjustments for supply chains, economic symbiosis, or consumer impact.

The Real Fallout: Global Supply Chain Chaos

Trade is not only about buying and selling, it’s interdependence. The world’s production system is built on super-sophisticated logistics, multi-country assembly lines, and razor-thin efficiency margins. It is fine to impose tariffs on the EU and Japan to encourage consumers to buy cars that are “America-made.”

However, what really is “America” made? A car built in the US may have:

• Pistons from Mexico

• Aluminum rods from Canada

• Sensors from China

• Software from Germany.

Now add up the cumulative tariff costs and see how much the drives up prices. So, tariffs are not just making foreign products expensive, they are shooting up domestic prices as well.

In fact, analysts estimate US-made cars could rise in price by $4,000-$10,000 even if they’re “Made in America.”

Why Crypto Is Getting Hammered

Alright, so let’s get to the main point. Why is crypto getting dunked on so hard?

1️⃣ Liquidity Drain

Tariffs = higher costs = inflation = rate hike fears.

Also: supply chain disruption = recession fears = risk-off sentiment.

Both of this leads to investors fleeing risk. In other words, they dump speculative assets like crypto.

2️⃣ Dollar Volatility

The dollar is the foundation of most crypto on-ramps and off-ramps.

Trump’s tariffs are shaking global faith in US dollar hegemony, ironically hurting the very asset he wants to protect (at least for now).

China is already talking about settling oil trades in yuan, and others are exploring non-dollar trade corridors.

For crypto, this means short-term chaos... but possibly long-term opportunity as nations look for dollar alternatives.

3️⃣ Investor Sentiment Crushed

Markets hate uncertainty. Right now, we have maximum chaos:

• Will tariffs rise further?

• Will China retaliate again?

• Will the Fed be forced to slash rates early?

• Will corporate earnings collapse?

This macro fog crushes speculative investment.

4️⃣ Tech Stock Selloff Hurts Crypto Correlation

Crypto trades more like tech than currency right now. As Apple, Nvidia, and Tesla drop 20–50% from December highs, crypto gets dragged down with them.

• Apple: down to $180 from $289

• Nvidia: $89.4, nearly a 60% drawdown

• Tesla: $222, off from $489 in December

Could This Be Bullish for Bitcoin Long-Term?

Yes. Ironically, this mess could ultimately push people into crypto.

• Protectionism may weaken dollar dominance

• Capital controls may push people to use decentralized assets

• Uncertainty about trade and inflation makes Bitcoin’s fixed supply more appealing

For now, crypto bleeds with the broader market. But in the long arc of economic realignment, decentralized, permissionless systems may emerge as the big winners.

Markets are down now, but we’ve seen this story before, and we know how it ends.

In The Coiners Circle, we don’t only survive downturns, we prepare for what comes next. Veteran traders are already mapping out the next wave of opportunity.

Join us, stay sharp, and be ready when the tide turns.