Tariff Shock Triggers Crypto Sell-Off as Inflation Fears and Dollar Strain Boost Bitcoin Hedge Narrative

-

Trump’s unexpectedly harsh tariffs, including 10-49% tariffs on imports, may have sparked a panic-driven sell-off in the wider market, with ETH and SOL dropping ~6%, and the market shifting to stablecoins as fear spiked.

Beyond the initial shock, these tariffs threaten the U.S. economy, which could ripple into crypto markets.

Higher import costs—particularly from key partners like China —could accelerate inflation, with some models projecting a 2-3% CPI uptick by Q2 2025 if trade wars escalate.

Concurrently, the Atlanta Fed’s GDPNow estimate of a 2.8% GDP decline for Q1 2025 may worsen as consumer spending and business investment falter under tariff pressures.

A weakening dollar from economic strain and potential Fed easing could boost BTC as a hedge, with data showing early accumulation trends.

However, altcoins may need stronger fundamentals to benefit in the long term.

Ryan Lee, Chief Analyst at Bitget Research

Disclosure:This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Kriptoworld.com accepts no liability for any errors in the articles or for any financial loss resulting from incorrect information.

LATEST POSTS

Trump’s Tariff Threats Fuel Bitcoin Momentum Amid Inflation and Fiat Uncertainty

Trump’s proposed tariffs potentially supercharge Bitcoin’s appeal by shaking confidence in fiat currencies like the U.S. dollar, especially if inflationary pressures mount, as Deutsche Bank’s...

TRX in Focus: Tether’s $1B Transfer and Stablecoin Bill Shape Tron’s Liquidity and Regulatory Outlook

Tether’s $1 billion USDT transfer to the Tron network in January 2025 aimed to boost liquidity, potentially increasing TRX demand for transaction fees. While exact price...

AI Hype Meets Meme Mania: The Rise (and Risk) of Ghibli-Themed Crypto Coins

Ghibli-themed memecoins, sparked by OpenAI’s GPT-4o image generation tools, have surged in popularity, with tokens like Ghiblification seeing massive gains, such as a 30,000% increase...

JELLY Delisting on Hyperliquid Sparks Debate Over DeFi Risk, Trust, and Market Integrity

The delisting of JELLY from Hyperliquid due to suspected market manipulation has spotlighted risks in DeFi, particularly for hype-driven projects. Hyperliquid brands itself as a decentralized...

Most Popular

Guest posts