The last few trading days were dominated by Donald Trump‘s press conference in the Rose Garden surrounding “Liberation Day.” Surprisingly, Bitcoin, known as a so-called “risk asset,” has been remarkably stable, holding well above the $80,000 mark.
The Big Picture for Bitcoin
To briefly recap a few points: the level of import tariffs depends on whether the US has a trade deficit or surplus with the respective trading partner. If the US imports more goods from a country than it exports to it (e.g., China or Europe), the Trump administration divides this by that country’s exports and simply calls it “tariffs, including currency manipulation and trade barriers.”
In the case of countries like Brazil and the United Kingdom, countries with which the US has a trade surplus, the Trump administration is imposing blanket import tariffs of 10%
On Friday, China then announced retaliatory tariffs of 34% on all imports from the US starting April 10th. A broad sell-off followed. That evening saw not only gold outflows, but also inflows of the US dollar: an indication of an impending wave of liquidations, and Bitcoin continued to hold steady above $80,000.
Consequently, fears of stagflation spread in the market, with yields on 10-year US bonds falling below 4% and to their lowest levels since October 2024, before the US presidential election. At the same time, the futures market, in the form of the FED Watch Tool, is now expecting, with increasing recession concerns and a probability of over 70%, that the US Federal Reserve will cut interest rates by 100 basis points by the end of the year.
And this is where Bitcoin’s solid performance comes into play: the stock market reaction wasn’t long in coming on Wednesday. At the press conference convened, one could follow in real time how the markets, in the form of the S&P 500, initially reacted positively. After the presentation of the “shield” presented in the analysis above, which Trump held up to the camera, then plummeted, and in just a few minutes, more than USD 2 trillion in market capitalization vanished from the S&P 500. Stocks like Nike, which have been dramatically affected by import tariffs due to their supply chains and production sites in Asia, suffered a steep decline.
Bitcoin, on the other hand, is not affected by import tariffs. And with the prospect of monetary easing from the Fed sooner rather than later, a rather bullish picture can also be painted for Bitcoin.
However, this does not rule out the possibility that the bearish scenario outlined last week, with a renewed test and break below the recently established annual lows of around $78,000, will nevertheless take shape.
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