Financial Insights That Matter
President Donald Trump‘s threat of a 50% tariff on European Union goods, set to take effect June 1, has halted the recent rally in Bitcoin BTC/USD and altcoins, with experts warning of heightened market volatility.
What Happened: The announcement, posted on Truth Social, triggered a 4% dip in Bitcoin’s price to $108,000, alongside turbulence in the S&P 500, as investors react to escalating trade tensions.
Nicolai Sondergaarda research analyst at Nansen, described the tariff threat as a likely negotiating tactic rather than a policy set to materialize.
“Trump’s announcement seems intended to influence ongoing discussions, possibly signaling that negotiations are not progressing as intended,” Sondergaard told Benzinga.
He noted that Bitcoin’s dip and S&P 500 volatility reflect the sensitivity of risk assets to trade-related headlines, but he expects the disruption to be temporary unless further actions escalate tensions.
“Unless additional comments from Trump are made, I’d expect market sentiment to remain positive,” he added.
Trump’s Truth Social post criticized the EU for unfair trade practices, citing a $250 billion U.S. trade deficit and issues like trade barriers and VAT taxes.
“Our discussions with them are going nowhere! Therefore, I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025,” he stated.
The post emphasized exemptions for U.S.-manufactured products, aligning with Trump’s push for domestic production.
Speaking with Benzinga, Charlie Huco-founder of Bitlayerremains cautiously optimistic about Bitcoin’s trajectory despite the tariff-induced dip.
Also Read: Bitcoin Rally Has Room To Run, Says Morgan Creek’s Mark Yusko
“If Bitcoin maintains the $110,000 level, we might still see it reach $120,000,” Hu said.
Disclosure: 82% of retail CFD accounts lose money
He pointed to strong market sentiment and trading volume, bolstered by anticipated positive crypto policy news at the BTC 2025 Las Vegas conference next week.
Hu’s outlook suggests resilience in Bitcoin’s bullish trend, provided key price levels hold.
Iliya kalcheva dispatch analyst at Nexusacknowledged Bitcoin’s strong fundamentals but warned of potential volatility.
“Bitcoin’s momentum remains intact, but a high-volatility weekend could test conviction,” Kalchev said.
He highlighted an upcoming options expiry on Friday, with significant bullish positioning above $96,000, and noted a Senate vote on a stablecoin bill as a potential market catalyst.
Kalchev also emphasized Bitcoin’s growing role in institutional portfolios, stating, “Fifteen years after trading for two pizzas, Bitcoin is rewriting monetary history.”
Why It Matters: The tariff threat follows a volatile period for markets, with the S&P 500 falling 1.5% and the CBOE Volatility Index spiking to 24.6 points after Trump’s announcement.
Earlier tariff actions in April, including a 10% baseline tariff and higher rates on China, caused Bitcoin to drop from $88,000 to $82,000, underscoring crypto’s sensitivity to trade policies.
Experts suggest that while short-term disruptions are likely, Bitcoin and altcoins could recover if tariff fears subside or positive regulatory developments emerge.
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