Bitcoin Pullback Below $80K Correlated with Trump Tariffs

The election of Donald Trump as the 47th President of the United States last November may have triggered a massive rally in Bitcoin and other cryptocurrency prices, but since he has taken office, this rally has given way to a sharp sell-off.

Taking a look at cryptocurrency price data provided by Binance, we can see that, since Inauguration Day (January 20, 2025), Bitcoin has fallen from $109,000 to around $87,500 as of 3/28/2025, or by nearly 20%. At one point earlier this month, Bitcoin was changing hands at prices below $78,000, which represented a more than 28% decline since Trump once again took office.

Initially, one could chalk up this sell-off to investors “selling on the news” of the Trump administration implementing policy changes beneficial for the further growth and development of the cryptocurrency space. However, most of this Bitcoin price decline can be attributed to Trump’s aggressive efforts to implement and/or raise tariffs on numerous U.S. trading partners.

The latest statements from Trump may suggest that the President implements fewer of these tariffs than initially expected. However, after Trump’s April 2 “Liberation Day” tariff announcement, uncertainty remains high in the global financial markets, the cryptocurrency market included.

Tough Talk on Tariffs Has Hammered Bitcoin Prices

It wasn’t long after Trump once again entered the White House that tough tariff talk began to have a negative impact on the performance of Bitcoin. On Feb. 1, Trump announced his initial set of tariffs, which included a 10% tariff on goods from China, and a 25% tariff on goods from Canada and Mexico.

Although Trump paused the Canadian and Mexican tariffs, as the two nations agreed to concede to border control demands from the U.S., Trump continued to announce news tariffs. These tariffs were met by retaliatory tariffs and other measures by other nations.

As a result, fear, uncertainty and doubt once again hit both the stock market as well as the crypto market. With cryptocurrencies considered a “risk on” asset, Bitcoin in particular was hard hit by the market’s flight to safer assets to ride out this latest round of market turbulence.

With this, it’s not surprising that, at one point, Bitcoin fell back to price levels last hit before the November election, effectively wiping out the positive impact of Trump’s electoral victory on prices.

Another Round of Volatility May Lie Ahead

In more recent weeks, Bitcoin has embarked on a partial recovery. In large part, due to Trump and his administration softening their tone regarding tariff implementation. 

The walking back of tough tariff talk has especially picked up in the past week, with Trump himself stating that tariffs will “probably be more lenient than reciprocal.” Yet while such statements are easing tariff-related concerns, driving investors back into risk-on assets like Bitcoin, tariff-related concerns have not yet completely gone away.

In the lead up to his planned April 2 tariff announcements, an event the President is referring to as “Liberation Day,” Trump has announced additional heavy tariffs, including a 25% duty on automobile imports. With this, it’s unclear whether the new tariffs revealed on “Liberation Day” will still prove less stringent than expected.

There’s still the risk that these new tariffs elicit a further bearish reaction from the market. If the latter proves true, it may trigger a new round of volatility, wiping out the recent relief rally for both stocks as well as Bitcoin.

That Said, The Door Remains Open for an April Bitcoin Rally

It’s far from set in stone that Bitcoin is set to experience yet another round of price weakness. With Bitcoin still down far from where it stood on Inauguration Day, one could argue that tariff uncertainty remained baked into its valuation.

Even if “Liberation Day” unveils a new series of retaliatory tariffs, the market could still perceive them as less severe than expected. In turn, the recent relief rally could carry on into April. That’s not all. Additional catalysts, such as the latest round of inflation data, may help to sustain a continued move to higher prices.

Hence, tariff worries notwithstanding, the door remains open for an April Bitcoin rally.