Trump Tariff Tsunami Threatens To Wash Away Bitcoin Bull Market, Commentator Warns

Bitcoin BTC/USD continues its downward spiral, prompting a debate among market commentators to what extent macroeconomic data is influencing the correction.

What Happened: In an X post on Thursday, global capital markets commentator The Kobeissi Letter said the trade war is back as President Trump threatened a potential 25% tariff on the European Union.

This caused the S&P 500 to shed $500 billion in market cap and Bitcoin to follow suit, briefly dipping below $84,000. At the time of writing, the apex crypto is down 3%, trading around $85,500.

The Kobeissi Letter notes that inflation expectations have surged from 2.7% to 4.3% and warns tariffs could add $3,000 to car prices and raise food costs due to reliance on Mexican imports.

The commentator highlighted that while gold was up 10% Bitcoin dropped 10%, diverging from its typical role as a hedge.

They believe that with Bitcoin in a bear market and the S&P down 4%, continued market turbulence into the next quarter is on the table.

The Volatility Index (VIX) is rising, up 30% in the past two weeks, leading the commentator to conclude that "volatility is here to stay."

Also Read: Peter Schiff: Bitcoin’s Rally To $100,000 Is ‘Repayment’ By Trump To Crypto Supporters, But $50,000 May Be On The Cards

Why It Matters: In another tweet, Kobeissi Letter highlighted that crypto markets have erased $800 billion in valuation since trade war concerns began on Jan 20.

While Bitcoin was viewed as a decentralized hedge against uncertainty, its correlation with risky assets has grown rapidly. 

This is evidenced in Bitcoin ETF outflows, which have reached record levels over the past week.

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• Bitcoin Steadies Around $86,500 As Spot ETF See Another $750 Million Outflows On Wednesday

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