Trump’s tariff update came in abruptly. The crypto tribe rarely had any time to react to it. However, the far-flung effects of the event are enormous. Binance, the popular trading platform, performed a detailed study of the event and came up with a list of repercussions.
The global crypto market is facing the odds at the same time. Trump launched some protectionist policies in his latest tenure. For example, some aggressive tariff policies were declared on 2nd April.
It is referred to as Liberation Day in the US. However, the tensions provoking strong backlashes from popular trading partners were unparalleled.
Finds from The Binance Report
According to the Binance report, the consequences of the report were the same as the repercussions after the introduction of the Smoot-Hawley Tariff Act in 1930. Meanwhile, the average US tariff increased to 19%, marking an increase from 2.5% last year.
Binance illustrated that several changes have affected investors’ confidence. Leading to a crash in crypto valuations. The trading platform marked that:
“The market sentiment is highly cautious, with investors sharply reacting to Trump’s tariff announcements.”
Effect on The Major Coins
The downturn in the market has affected the major coins already. BTC and ETH are sharply down. Meanwhile, some altcoins are also sharing the same fate. Meme coins are down by 50%, an alarming outcome. In addition, a lot of investors are turning to gold and silver which saw a major spike in value in recent times.
Looking into The Future
Binance found that ongoing geopolitical and economic uncertainties might overshadow the long-term value of crypto investments. Experts say that the rate of volatility will increase so much so that it might lead to a trade war at some point.
Lastly, the Binance report also speaks of a recovery pathway should some conditions improve. However, the most critical factor is a surge in the current economic status. For example, the inflation rate should drop substantially below 4%.
Once the macroeconomic conditions are up, new narratives will appear and crypto investments will soar. Until that happens, it is better to adopt the wait-and-watch policy.
