How Trump’s Tariffs Are Affecting Crypto – Explained Simply

Since his re-election as the President of the United States, Donald Trump has pushed for sweeping trade tariffs that have shaken up global markets. And cryptocurrency is no exception.

a black and white photo of a bunch of cubes
Photo by Shubham Dhage on Unsplash

While tariffs might sound like a topic reserved for manufacturing and global trade, they’re actually also relevant to Aussie crypto holders and investors.

With over 560 million crypto owners worldwide, it’s clear these measures have the potential to affect many people. So, how exactly do Trump’s tariffs actually influence Bitcoin, Ethereum, and the wider crypto market?

In this post, we’ll explain how Trump’s tariffs are affecting crypto in a way that is hopefully easy to understand.

What Are Trump’s New Tariffs?

In early April 2025, Trump revealed plans for broad new tariffs, which were coined by some media outlets as “Liberation Day” tariffs. These included:

His stated goal was to bolster U.S. domestic manufacturing and reduce dependency on foreign markets, particularly China. However, these tariffs have broader global effects, which affect supply chains, inflation, and market sentiment that go far beyond the United States.

A Sharp Response from Crypto Markets

Immediately following the announcement of these tariffs, crypto markets tumbled. Bitcoin, for instance, dropped below the $82,000 mark, while Ethereum fell over 5%. Additionally, major crypto stocks like Coinbase and MicroStrategy were also hit hard, incurring double-digit losses.

As reported by Reuters, the sweeping nature of the tariffs “jolted markets,” which caused broad sell-offs across traditional and digital assets. This downturn underscores how sensitive the crypto market can be to macroeconomic policies and sudden geopolitical developments.

This kind of reaction isn't new. Indeed, investors on platforms like Bitcoin often move into a “risk-off” mode when uncertainty rises, and unfortunately, crypto is still considered a risk asset by many institutions.

Where to Buy Crypto Safely

If you're looking to start or expand your crypto portfolio during these turbulent times, it’s essential to use a reliable platform.

Thankfully, there are a few around, including Bitcoin.com.au, which is a trusted Australian exchange that offers an easy and secure way to buy, sell, and learn about digital currencies.

Internationally, Gate.io, Binance and Bybit are all great options.

How Tariffs Influence Inflation and Investment Behaviour

Tariffs often make imported goods more expensive, and over time, this can lead to higher inflation as companies often pass on these costs to consumers.

As inflation makes fiat currencies (like the Australian or US dollar, or the British pound) lose purchasing power, this is something that tends to push investors toward assets with fixed supply, like Bitcoin. In that sense, Bitcoin is increasingly seen as an inflation hedge, in much the same way as gold is.

However, the short-term effect of trade uncertainty is usually a sell-off, not a buy-in. This is because investors prioritise liquidity in the face of risk. Therefore, over time, if inflation fears grow, digital assets could regain favour.

The U.S. Dollar’s Strength Impacts Bitcoin's Value

The strength of the US dollar is crucial to Bitcoin’s price, since most crypto is priced in USD globally. Subsequently, if tariffs cause economic instability, it could lead to a weaker dollar, particularly if the Federal Reserve eases interest rates to support the economy.

While a weaker dollar typically boosts the value of Bitcoin, this is not always immediate or guaranteed. The crypto market often moves based on speculation, and traders may factor in other variables like government regulations, interest rates, or institutional movements into the equation.

Crypto Mining and Hardware Tariffs

There’s another angle to consider, and that is crypto mining. Tariffs on Chinese tech exports could increase the cost of components like GPUs, ASIC miners, and other mining equipment. This would raise overheads for mining operations globally, including those in places like the US, Kazakhstan, and Canada.

Additionally, more expensive mining setups could discourage new entrants and even lead some smaller operators to scale back or shut down. That, in turn, could affect transaction processing speed and network security, especially on blockchains like Bitcoin that rely on proof-of-work systems.

In short, tariffs on hardware could choke some of the infrastructure that keeps crypto ecosystems running.

Institutional Investors: Hesitation Or Opportunity?

Large investors, such as those involved in pension funds, hedge funds, and superannuation schemes, tend to keep a close eye on policy shifts like tariffs. Some may even see current volatility as a buying opportunity, especially if they believe digital assets will recover or act as a long-term hedge.

However, others are holding back. As DLNews recently reported, analysts are split on whether Trump’s tariffs will result in more institutional adoption of crypto or continued hesitation due to market turbulence and lack of regulatory clarity.

The regulatory environment is another major factor. Some speculate that Trump’s return to power could result in lighter-touch crypto regulation, which might encourage more participation. Others argue the uncertainty around tariffs creates an unstable investment climate, which therefore deters big-money moves.

What Might Happen in Trump’s Presidential Term?

Looking ahead, if Trump follows through with broader protectionist policies, we can expect continued global economic tensions.

For crypto markets, that could mean:

As CoinDesk notes, “crypto thrives in chaos”, especially when trust in traditional financial systems begins to fray.

That said, a Trump presidency could also bring unpredictable regulations, currency instability, or tighter global trade constraints that ripple across the entire crypto ecosystem. However things play out, it will be interesting to see what happens.