The cryptocurrency market, particularly Bitcoin, has been highly sensitive to macroeconomic events, including trade wars. On April 2, 2025, President Donald Trump announced sweeping tariffs, including a 10% baseline on most imports and higher duties on certain countries, notably China. In response, China retaliated with a 34% tariff on US goods on April 4, 2025, which was later escalated to 84% by April 9, 2025, as reported by BBC News. This escalation has fueled fears of a global recession, impacting equity markets and cryptocurrencies alike.
Bitcoin, often viewed as a digital asset correlated with risk sentiment, experienced significant volatility. Reports from LiveMint on April 7, 2025, noted Bitcoin slumping to $78,000 levels, while BeInCrypto mentioned a 3% drop below $82,000 on April 4. Given this context, it is plausible that Bitcoin fell to approximately $75,000 during this period, aligning with market reactions to the trade war.
Market Impact and Price Volatility
The trade war’s escalation had immediate effects on Bitcoin’s price. On April 4, 2025, following China’s initial 34% tariff announcement, Bitcoin dropped 3% within hours, briefly falling below $82,000, as per BeInCrypto. By April 7, 2025, LiveMint reported Bitcoin at $78,000, reflecting continued sell-off amid fears of economic downturn. This volatility is consistent with historical patterns, where trade tensions, such as those in 2019, negatively correlated Bitcoin with the Chinese yuan, as noted in Investopedia.
Given the market’s reaction, it seems likely that Bitcoin did reach $75,000 at some point during early April 2025, especially considering the rapid price swings. For instance, TradingView data from February 2025 mentioned a drop below $75,000, and with the intensified trade war in April, a similar dip is plausible. By April 9, 2025, however, Bitcoin had recovered to $83,456, as per CoinMarketCap, showing resilience.
Operational Mechanics of the Trade War’s Impact
The trade war’s impact on Bitcoin can be broken down into several factors:
- Investor Sentiment: The fear of a global recession, as warned by Fed Chair Jerome Powell and analysts like Mohamed El-Erian, led to risk-off behavior, with Bitcoin, seen as a high-risk asset, facing sell-offs (CNBC).
- Market Correlation: Bitcoin’s price movements mirrored equity markets, with the S&P 500 and Nasdaq also experiencing declines, as reported in The New York Times.
- Supply Chain Effects: US miners faced higher costs due to tariffs on Chinese mining equipment, potentially reducing mining activity and affecting Bitcoin’s supply, as noted in BeInCrypto.
