Bitcoin price crashed 7% due to Trump’s tariff shock

Bitcoin prices plummeted 7.2% from $88,526 to $82,150 four hours ago, four hours ago, after US President Donald Trump’s mutual tariff announcement. The sudden drop coincides with the broader market defeat set by what is described as one of the biggest tariff packages in modern-day US history.

Bitcoin crashes after Trump’s tariff bomb

On Wednesday afternoon, the market was shaken by a series of “mutual tariffs” that President Trump claimed would collect “at one time” in 185 countries. The news has caused a stir across global finance as the S&P 500 futures market reportedly cut its market capitalization by $2 trillion within 15 minutes.

According to Kobeissi’s letter (via X): “The mutual tariffs are officially here. President Trump has announced the tariffs of 185 countries at once, one of the biggest tariffs in US history.

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The initial press coverage pointed to a baseline tariff of 10%. But, as Trump said, the complexity and scope of the scheme has become clearer. He revealed that tariffs are “mutual” but are set at half the rates other countries currently levied on US goods. In many cases, it is well above the 10% baseline.

For example, China is reportedly applying a 67% tariff on certain imports from the US, suggesting that 34% tariffs on Chinese imports are mutually subject to each other. Meanwhile, the European Union could face 20% tariffs. “This is very different from the 10% tariffs across the board,” Kobeissi’s letter pointed out, adding that these significantly higher proportions have produced large volatility.

At one point in Trump’s announcement, the S&P 500 futures rebounded from a 2% up to a 4% drop. By the time the “Make America Wealthy Again Events” ended, the market was still holding these losses. The Nasdaq100 futures show a potential 500 points reduction from previous levels.

Bitcoin, which had risen 8.9% since Monday morning, experienced the same confusion immediately, passing 7.2% of its value. Julio Moreno, Cryptoquant’s research director, said via X:

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He explained in more detail. “Trump introduced too much uncertainty into the global economy with tariffs. If tariffs last long enough, there is a high chance of a recession. This of course has conflicted with the price of Bitcoin and crypto despite a positive regulatory environment and (strategic Bitcoin reserve).”

Economic forecast

The exact long-term impact remains unknown, but several prominent institutions have already issued forecasts.

JP Morgan analysts warn: “Statically, today’s announcement raises revenues of less than $400 billion, or about 1.3% of GDP. This is the largest tax increase since the 1968 Revenue Act. Total exports and investment expenditures.”

At the same time, Kobaisi’s letter noted that US tariff rates (because the new set of duties is in effect) can exceed levels not seen since World War II. They warn that the White House’s $600 billion annual target tariff revenue could be optimistic, suggesting that only half of that amount will be obtained based on current data. Additional exemptions for copper, pharmaceuticals, semiconductors, wood, and more amplify the confusion and show that tariffs vary widely depending on sector and country of origin.

As Kobeissi’s letter quoted, UBS also raised vigilance about inflation. “Blake: UBS says that President Trump’s permanent implementation of mutual tariffs will raise inflation to 5%. We are on the brink of 5% inflation and negative GDP growth.”

President Trump had hinted at the coming soon “the biggest tax cut in American history,” but the market didn’t bounce back to the news. He designated Medicare, Medicaid and Social Security benefits to be spared from cuts, but investors and analysts appeared to be more focused on immediate shocks from the tariff package.

At the time of press, BTC recovered to $83,207.

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