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The global financial landscape is shifting rapidly as new U.S. tariffs send shockwaves through markets — and crypto is no exception. In just a few weeks, the digital asset market has seen a dramatic loss of over $1 trillion in market value, as traders reevaluate their risk exposure.
The catalyst? A sweeping new tariff policy announced by the U.S. government. Starting April 5, a flat 10% tariff on all imports has been implemented, with significantly higher rates imposed on key trading partners: 34% on China, 20% on the European Union, and 24% on Japan. The automotive industry, already under pressure, now faces an additional 25% duty.
This protectionist turn has pushed average U.S. tariffs to 18.8%, the highest level seen since the 1930s. The result: widespread volatility across both traditional and digital financial markets.
Crypto markets have taken a heavy hit. Since February, the total crypto market capitalization has fallen by 25.9%. Bitcoin has dropped 19.1%, while Ethereum is down a staggering 40%. Meme coins and AI-related tokens have been decimated, many losing more than half their value.
What’s surprising investors is how Bitcoin has behaved during the downturn. Rather than serving as a hedge, it’s been trading in tandem with equities. Its correlation with the S&P 500 has risen sharply, now standing at 0.47. In contrast, gold has gained 10.3% over the same period, reinforcing its role as a reliable safe-haven asset.
With inflation expectations climbing and market uncertainty growing, institutional sentiment is shifting. The idea of Bitcoin as "digital gold" is being tested, and for now, traditional gold appears to be winning.
As the trade war continues to evolve, crypto faces new questions: Can it decouple from traditional risk assets? Or will it remain vulnerable to macroeconomic shocks just like stocks
