In an unexpected move, President Donald Trump has temporarily frozen tariffs for 90 days and slashed reciprocal duties to just 10% for most countries. The news sent shockwaves through the global financial markets, with cryptocurrencies leading the charge. Bitcoin, in particular, soared to over $81,000 in mere minutes, while traditional equities followed suit with impressive gains.
Bitcoin Surges as Tariff Pause Shakes Markets
Bitcoin (BTC) jumped by 5% immediately following Trump’s announcement, reclaiming the $81,000 threshold. This came after a brief drop earlier in the week when the President’s tariff plans were implemented, pushing Bitcoin below the $80,000 level. The sudden market reaction highlights cryptocurrency’s sensitivity to political and economic developments.
Trump’s tariff decisions were framed as a response to China’s trade escalation. The president raised tariffs on Chinese imports to 125%. At the same time, he announced a pause on new tariffs for 90 days and reduced reciprocal tariffs to just 10%, a measure aimed at easing trade tensions with other countries.
Global Markets React in Unison
Following Trump’s surprise announcement, the reaction in both the cryptocurrency market and traditional equities was immediately dramatic. The total cryptocurrency market capitalization surged above $2.6 trillion, driven by Bitcoin’s sharp rise and significant gains in altcoins like Ether, Solana, and XRP. Ether, for example, climbed 7% to hit $1,580.
In the traditional market, major stock indices such as the S&P 500, Dow Jones, Nasdaq, and Russell 2000 all saw impressive jumps, with gains exceeding 5% shortly after Trump’s announcement. This mirrored the surge in digital assets, further solidifying the idea that global markets are increasingly intertwined and respond to similar catalysts.
Experts Weigh In on the Volatility
The sudden volatility in crypto and traditional markets didn’t surprise many analysts. Dr. Kirill Kretov, a senior automation expert at CoinPanel, noted the increasing similarity between crypto and traditional markets. “When traditional markets are moving like this—spiking by 8% on fake news and then correcting by 3.5%—it’s clear that volatility is the new normal,” Kretov said. “Crypto markets, especially with their thinner liquidity, are naturally going to mirror these moves.”
Market watchers had already predicted a potential bounce in markets, with some analysts eyeing the release of U.S. economic data, such as the Federal Open Market Committee (FOMC) meeting minutes, Consumer Price Index (CPI), and Producer Price Index (PPI), as catalysts for a market recovery.
The Federal Reserve and Potential Economic Impacts
Federal Reserve Chairman Jerome Powell has cautioned that the central bank will closely watch economic data rather than respond to political statements. While Trump’s tariff policies are seen as a way to leverage pressure on China, Powell has expressed concerns over the broader economic consequences, including inflationary pressures and slower growth in the U.S. economy.
With multiple key economic reports due in the coming days, the direction of both traditional markets and cryptocurrencies will depend heavily on whether these data points suggest inflationary trends or indicate a cooling economy. Analysts remain split on whether this will trigger a short-term recovery or lead to further volatility.
