As President Trump announced new tariffs, the US stock market faced a fluctuating wave. Like many others disappointed, the bitcoin (BTC) investors also joined the league.  Bitcoin (BTC), the world’s most popular and largest cryptocurrency by market capitalisation, traded lower by nearly 0.61 per cent, at around $82,999.65 at 11:05 AM on Friday, April 4, 2025.

As of April 3, Bitcoin was trading at around $83,000, with the overall digital asset market down more than 4% in 24 hours. Major altcoins, including Ethereum and Solana, also saw declines of over 6% and remained at multi-month lows.

According to LMAX Group market strategist Joel Kruger

“This moment feels like a turning point. We see market participants increasingly drawn to [BTC’s] appeal as a store-of-value asset and a compelling diversification tool amid the uncertainty.”

Bitcoin at ‘Higher Lows’ 

Kruger also highlighted that while the Nasdaq and S&P 500 have plummeted to new 2025 lows, bitcoin for the moment is holding well above its year-to-date bottom of $75,000 — what technicians like to call “higher lows.”

Bitcoin Presents Investment Opportunity 

Despite this volatility, some analysts see the tariff announcement will removing uncertainty from the market. For instance, Valentin Fournier, Lead Analyst at BRN, stated that with speculation now reduced, institutional investors could return, increasing buying pressure. David Hernandez, a Crypto Investment Specialist at 21Shares, noted that while the tariff rates were slightly higher than expected, the announcement provided much-needed clarity, which could encourage institutional investment. 

Both analysts pointed out that Bitcoin will regain momentum, possibly approaching $90,000.

How Tariffs Could Drive BTC Higher

BitMEX co-founder Arthur Hayes outlines multiple factors that could make the current economic environment favorable for Bitcoin:

  • Weakening U.S. Dollar Index (DXY): As investors around the globe are selling off U.S. equities and repatriating their funds, the DXY could fall, boosting demand for alternative assets like Bitcoin
  • Fed Rate Cuts & QE: Hayes noted a sharp drop in the two-year Treasury yield after the tariff announcement, signaling expectations of Federal Reserve interest rate cuts and potentially a return to quantitative easing (QE)
  • Weaker Chinese Yuan: With China now facing new tariffs, Hayes predicts that Beijing may let the yuan (CNY) weaken past 8.00, pushing Chinese investors to seek hedges like Bitcoin to preserve wealth

Gold is still preferred over Bitcoin

Analysts from JPMorgan believe that although bitcoin is often termed as digital gold, people still prefer to invest in real gold rather than the digital gold. Nikolaos Panigirtzoglou from JP Morgan stated 

“Bitcoin’s volatility and correlation with equities raise questions over its ‘digital gold’ narrative. We see gold continuing to rise as the major beneficiary of the debasement trade,” 

Bitcoin dropped ahead of the Federal Reserve’s key policy decision

It is not the first time that bitcoin has plummeted this year. In March, Financial markets took a hit as investors grew cautious ahead of the Federal Reserve’s key policy decision. Bitcoin dropped to $81,300, losing 3.5% in 24 hours, while major U.S. stock indices also declined. The Nasdaq slid 1.7%, and the S&P 500 dropped 1.1%, reflecting uncertainty across global markets.