Bitcoin (BTC-USD) saw a modest 1% increase early Thursday, climbing to $87,500 (£67,743), even as global markets grappled with the economic impact of U.S. President Donald Trump’s latest trade move—a 25% tariff on foreign-made automobiles and auto parts.
The new tariffs, set to take effect on April 2, are aimed at revitalizing domestic car manufacturing. However, investors are wary of potential market instability, and equity markets have already shown signs of unease.
Investor anxiety translated into a sharp sell-off in traditional markets. On Wednesday, the S&P 500 (^GSPC) dropped about 1%, while the tech-heavy NASDAQ (^IXIC) saw a steeper decline of 2% as fears of a trade war rattled Wall Street.
Meanwhile, GameStop (GME) defied the downward trend, soaring nearly 12% after its board unanimously voted to adopt bitcoin as a treasury reserve asset. The move signals growing corporate interest in digital assets, though the broader crypto market remains cautious.
Analysts at QCP Capital pointed out a clear divergence in investment flows. Spot bitcoin exchange-traded funds (ETFs) continue to attract capital, while spot ethereum (ETH-USD) ETFs have recorded steady outflows, highlighting shifting investor sentiment in the digital asset space.
Beyond investor trends, industry experts are sounding alarms over potential supply chain disruptions. Agne Linge, Head of Growth at WeFi, warned that tariffs on semiconductors could pose a significant challenge to the crypto industry.
“With bitcoin mining heavily reliant on high-performance chips, increased costs and possible supply shortages could dent mining profitability. If smaller operations are forced to shut down, network security could be at risk,” Linge explained.
With economic uncertainty on the rise, traditional safe-haven assets are drawing renewed interest. Gold (GC=F) surged to a weekly high of $3,035 on Thursday, reflecting a flight to stability amid market turbulence.
Messari research analyst Sam Ruskin underscored this trend, commenting on X.com: “The simultaneous pump in bitcoin and gold suggests investors are hedging against mounting economic fears, trade war concerns, and post-inauguration uncertainties.”
As the financial world digests the implications of these new tariffs, market watchers will be closely monitoring their ripple effects across stocks, crypto, and commodities. The coming weeks could bring heightened volatility, making it crucial for investors to stay informed and agile in their strategies.