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

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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.

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