Bitcoin Crashes Amid Tariff Drama, Is Crypto Market Doomed?

Bitcoin, designed as a decentralised digital currency, has shown yet again its notorious volatility. After peaking at $109,000 earlier this year, the cryptocurrency plunged below the key support level of $80,000 at the beginning of the week.

The price action reflects how investor sentiment and macroeconomic factors can cause dramatic price swings. As of Friday at 11:15am, Bitcoin began to rebound, trading around $81,634.09.

However, the broader market remains jittery with uncertainty, prompting debates on whether Bitcoin is a safe haven or just another risky asset.

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Tariff Tensions and Trump’s Impact on Bitcoin

The latest downturn in Bitcoin’s value, according to industry experts, is linked to US President Donald Trump’s tariff announcements. Roger Eskinazi, managing partner at Tickmill South Africa, explained, “Risk markets across the board have recoiled heavily, with many gapping lower at the weekly open as traders brace for another week of severe price declines.”

A brief rally ensued following Trump’s announcement of a 90-day pause on new tariffs, temporarily lifting equities and digital assets.

However, the relief was short-lived, and both Bitcoin and Ethereum (which fell nearly 4% at the time of writing) retreated, underscoring the sensitivity of cryptocurrency markets to geopolitical and economic shifts.

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Forecasts and Future Trading Opportunities

Bloomberg senior commodity strategist Mike McGlone warned of a significant downturn, noting the potential for Bitcoin to drop to $10,000—a level last seen in 2020. He recalled,

“In 2020, Bitcoin was at $10,000. It was only a few years ago. I think it’s going back there.”

McGlone also linked the ongoing bear market in cryptos and stocks to actions taken since Trump’s inauguration, adding that the US stock market’s continued decline could further pressure risk assets.

He elaborated, “We are in a bear market in cryptos and we are in a bear market in the stock market. The US just cut off the dependence of the rest of the world exporting to the US for gaining wealth.”

Despite these bearish forecasts, McGlone emphasised the trading opportunities presented by this massive volatility, challenging the notion that Bitcoin is “digital gold.”

Instead, he described it as a trading machine with leveraged beta characteristics, urging investors to reconsider their investment strategies in light of ongoing global and market uncertainties.

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