Crypto Market Slides 3% As Trump’s Sweeping Tariffs Rattle Assets, Recession Fears Mount

The cryptocurrency market took a sharp hit Friday as President Donald Trump’s newly announced tariffs sent shockwaves across global financial markets.

Bitcoin dropped as much as 6%, briefly touching $82,000, while the broader crypto market shed around 3% amid rising fears of a global economic slowdown.

The downturn came after Trump declared April 2 “Liberation Day” and announced a sweeping 10% baseline tariff on all US imports. Higher duties were also imposed on several major trading partners.

📉 Following Trump's tariff announcements yesterday, the S&P 500 is currently down -4.02% in Thursday trading. In the 2020's, there have only been 5 worse performing days:

🗓️ March 16, 2020: -11.98%​
🗓️ March 12, 2020: -9.51%​
🗓️ March 9, 2020: -7.60%​
🗓️ June 11, 2020: -5.89%… pic.twitter.com/TpTbYMDFZF

— Santiment (@santimentfeed) April 3, 2025

S&P 500 Sees Worst Drop Since 2022 as Trump’s Tariffs Rattle Global Markets

Trump framed the move as an effort to end “unfair trade practices.” His announcement triggered immediate volatility in both traditional and digital asset markets.

Global equities fell across the board. US stocks mirrored losses seen in Asia and Europe. The S&P 500 slipped back into correction territory, shedding nearly $2t in value. It was the index’s worst single-day drop since Sept. 2022.

Deutsche Bank has warned that the tariffs could shave 1% to 1.5% off US GDP this year.

Crypto markets weren’t spared. Ethereum (ETH), XRP and Solana (SOL) also posted losses, and the ETH/BTC ratio slipped to its lowest point since June 2020 before slightly recovering.

“We will likely continue to see the fallout of this strategy throughout Q2 and possibly throughout the summer, before Trump begins to ease off the pressure,” Ultra’s CEO Gus van Rijckevorsel said.

While he expects Trump to eventually return to the negotiating table, Rijckevorsel noted that “he’ll end up being the firefighter, putting out the fires of his own making.”

Trump Tariffs, Inflation and Budget Woes Stir Market Jitters Across Assets

Traders are now trying to understand how the tariffs will affect trade, interest rates and investor willingness to take risks.

Maksym Sakharov, co-founder at WeFi, said the business impact may be limited for now. However, he warned that inflation could make it harder for the Federal Reserve to cut interest rates.

Meanwhile, Washington’s upcoming budget debate is adding to market unease. The Treasury is currently using “extraordinary measures” to meet its obligations. Analysts warn that the US could face a funding crunch if a debt ceiling deal isn’t reached soon.

While Bitcoin has occasionally moved independently of traditional markets, recent performance suggests it is still sensitive to broader risk-off sentiment.

“Given the negative outlook in stock markets, we anticipate that selling pressure may also extend to cryptocurrencies,” said Ruslan Lienkha, chief of markets at YouHodler. “Though we do not expect a dramatic selloff in the short term.”