- Global trade war concerns are expected to pressure cryptocurrency and traditional markets until at least April 2, 2025, when Trump’s reciprocal tariff rates take effect.
- Bitcoin has dropped over 17% since President Trump’s January 20 announcement of import tariffs on Chinese goods.
- High interest rates are also contributing to market pressure, with the Fed likely to maintain current rates at its May 7 meeting according to market predictions.
Cryptocurrency markets remain under pressure from global trade tensions despite positive industry developments, with experts suggesting this trend will continue until at least early April when tariff policies may reach resolution.
Bitcoin has experienced a significant decline, falling more than 17% since January 20 when President Trump first announced import tariffs targeting Chinese goods. The announcement came immediately following his presidential inauguration, triggering waves across financial markets.
Nicolai Sondergaard, research analyst at Nansen, explained during Cointelegraph’s Chainreaction daily X show that trade tensions will likely continue impacting markets until at least April 2.
“I’m looking forward to seeing what happens with the tariffs from April 2nd onwards, maybe we’ll see some of them dropped but it depends if all countries can agree. That’s the biggest driver at this moment,” Sondergaard stated on March 21.
Risk assets could remain directionless until trade concerns resolve, which Sondergaard suggests might occur between April and July. This resolution could ultimately serve as a positive catalyst for markets that have been struggling under geopolitical uncertainty.
Trump’s reciprocal tariff rates are scheduled to take effect on April 2, despite Treasury Secretary Scott Bessent previously indicating a possible delay in implementation. This looming deadline has kept investors cautious across both traditional and cryptocurrency markets.
High interest rates represent another significant factor weighing on investor risk appetite. Sondergaard noted that markets are waiting for clear signals from the Federal Reserve before anticipating rate cuts:
“We’re waiting for the Fed to see proper ‘bad news’ before they will really start cutting rates.”
Currently, markets are pricing in an 85% probability that the Federal Reserve will maintain steady interest rates at the upcoming Federal Open Market Committee meeting on May 7, according to estimates from the CME Group’s FedWatch tool.
Despite these challenges, Iliya Kalchev, dispatch analyst at Nexo digital asset investment platform, sees potential positive signs. Kalchev told Cointelegraph that the Federal Reserve appears to view inflation and recession concerns as temporary, particularly regarding tariffs:
“Markets may now expect upcoming economic data with greater confidence. Cooling inflation and stable economic conditions could further boost investor appetite, driving additional upside for Bitcoin and digital assets.”
Kalchev recommended investors monitor several key economic indicators in the coming weeks, including Consumer Confidence reports, Q4 GDP data, jobless claims, and next week’s PCE inflation release to better gauge the likelihood of future rate cuts.
While cryptocurrency markets face these macroeconomic headwinds, the potential resolution of trade tensions in the April-July timeframe could provide a catalyst for renewed growth in Bitcoin and other digital assets.
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