Why are Trump's tariffs causing the price of cryptocurrencies to plummet?

The tariffs recently announced by US President Donald Trump have had a significant impact on cryptocurrencies, whose price has plummeted.

Since Friday and throughout the weekend, Bitcoin, the most popular cryptocurrency, has dropped significantly in value, dipping below $77,000 this Monday at 7:00 am (EDT). At some points in the early hours of the morning it dropped as low as $74,000. However, at the time of writing, it is slightly above $78,000.

This is due to the influence of tariffs on global markets and perception of economic risk. Although there is no direct effect on cryptocurrencies (which are not subject to tariffs because they are digital assets), their value is affected by the macroeconomic dynamics they generate.

Economic uncertainty and volatility

Tariffs introduce uncertainty in international trade. This often leads to falls in traditional markets (stocks, bonds, etc.) and a sense of risk-off - a time when investors seek safety and avoid risky assets.

Cryptocurrencies, perceived as high-risk assets, tend to suffer massive sell-offs in these contexts.

Dollar strength and inverse correlation

Tariffs tend to strengthen the US dollar as investors seek safe haven assets. Historically, Bitcoin and other cryptocurrencies have shown an inverse correlation with the dollar: when the dollar rises, digital currency prices tend to fall. With Trump's tariffs, the dollar gained ground against currencies of affected countries, putting downward pressure on the value of cryptocurrencies.

Inflation and monetary policy expectations

Tariffs raise the costs of imported goods, which can fuel inflation in the US. If the Fed responds with higher interest rates to control it, speculative assets such as cryptocurrencies become less attractive versus lower risk options such as bonds.

Positive long-term impact?

Despite initial declines, some analysts see a long-term upside. Tariffs could weaken the dollar's hegemony in global trade if countries seek alternatives. In this scenario, Bitcoin could gain traction as a digital gold or non-sovereign asset, especially if trade tensions escalate. However, this is speculative and depends on how Trump's policies and crypto adoption evolve.

It could also be an opportunity for the use of cryptocurrencies such as Bitcoin Cash, whose fast transactions and extremely low fees could lead to mass adoption for person-to-person payments without intermediaries, thus gaining ground on the dollar and other traditional currencies.

It is also estimated that many investors within the crypto ecosystem do not completely abandon the market, but migrate temporarily to stablecoins such as USDT or USDC, seeking stability in the midst of volatility.