Bitcoin: Recession And Tariffs Threaten The Bull Run!

Bitcoin, driven by post-election euphoria, reached a peak of $108,000 before falling below $80,000. Global economic instability and increasing trade tensions are fueling heightened volatility. Despite a pro-crypto rhetoric, Donald Trump adopts a protectionist policy that worries investors. Between recession fears and monetary uncertainty, the crypto market wavers in response to macroeconomic turbulence.

Trade tensions shaking up cryptos

Donald Trump’s return to the presidency reopens the file on trade tensions. His tariff decisions target strategic partners like Canada, Mexico, and China. The U.S. stock market has already lost $2 trillion.

Lawrence Summers, former Treasury Secretary, describes these measures as “poorly designed” in a post on platform X (formerly Twitter) on March 5, 2025. This uncertainty immediately impacts bitcoin.

Several key elements mark this situation:

• The new tariff barriers have triggered significant market instability.
• Bitcoin, historically seen as an alternative asset, is still very correlated with stock market fluctuations.
• The VIX volatility index has risen by a third, illustrating growing fear in the markets.

Market participants’ reactions are mixed. QCP Capital, a trading firm based in Singapore, highlights that “macroeconomic conditions continue to influence bitcoin’s trajectory, which remains closely tied to stock indices.”

However, some investors believe that bitcoin could benefit from a weakening dollar. Eugene Epstein, a Moneycorp officer, states that “if trade tensions cause inflation, the flight to crypto could accelerate.”

The market remains under pressure, however. Political and economic uncertainty is blocking investors’ decisions as they hesitate between taking profits or anticipating a bullish recovery.

Cryptos at the crossroads: between fears and opportunities

While some investors hoped for a lasting bullish market, the capital flight reflects a more mixed sentiment.

After Trump’s election, Spot Bitcoin ETFs saw record inflows, with over $10 billion invested.

But since February, this trend has reversed. Outflows are multiplying, a sign that confidence is waning in the face of economic uncertainty.

Bob Wallden, head of trading at Abra, notes that “tariffs are just a smokescreen.” He stated that “Trump uses tariffs as a negotiation lever, but they do not dictate the trajectory of cryptos. What truly matters is the budget tightening and American fiscal policy.”

In other words, the central question remains the availability of liquidity in financial markets. Less money in circulation means fewer investments in risky assets, which could hinder bitcoin’s rise.

The future of the crypto market will largely depend on the evolution of monetary and budgetary policies. If uncertainty persists, bitcoin could remain under pressure, just like stocks. For the moment, caution prevails. Investors oscillate between wait-and-see approaches and strategic repositioning, while bitcoin, true to its volatile nature, continues to evolve according to economic announcements.

Luc Jose A.

Diplômé de Sciences Po Toulouse et titulaire d’une certification consultant blockchain délivrée par Alyra, j’ai rejoint l’aventure Cointribune en 2019.
Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l’économie, j’ai pris l’engagement de sensibiliser et d’informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu’elle offre. Je m’efforce chaque jour de fournir une analyse objective de l’actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.