Trump’s recent mass tariffs are causing major ripples in the global economy, especially in the crypto market. History shows us that similar large-scale tariff implementations have happened twice before in the US, and the results weren’t pretty.
A Look Back at Past Tariff Troubles
A market commentator pointed out that events similar to Trump’s tariffs occurred in 1828 and 1930. Both times, these tariffs led to significant economic depressions. This historical precedent raises serious concerns about the potential consequences of Trump’s actions.
Current Market Reactions
Experts are predicting serious economic fallout from Trump’s tariffs. Goldman Sachs estimates a 35% chance of a recession, and prediction markets show a high probability of a recession this year. This is bad news for crypto.
Bitcoin’s price has already taken a hit, dropping from $88,000 to around $81,000 after the tariff announcement. Altcoins are also showing signs of a bear market. The stock market suffered a massive $2.85 trillion loss – its worst in four years. Since Bitcoin often moves in line with the stock market, this is a worrying sign.
Will the Fed Intervene?
Crypto analyst Mikybull Crypto predicts the Federal Reserve (the Fed) will step in to mitigate the economic damage. They might cut interest rates and implement quantitative easing (QE) to inject liquidity into the market.
This is a potential shift from the Fed’s previous stance. Fed Chair Jerome Powell previously warned that Trump’s tariffs could cause inflation. However, with recession looking more likely than inflation, the Fed might be forced to act. Interestingly, Trump has publicly urged the Fed to cut interest rates, possibly using tariffs as leverage. A rate cut could be positive for crypto, potentially leading to a bull run.
The Current Crypto Climate
At the time of writing, Bitcoin is trading around $82,600, down slightly over the past 24 hours. The situation remains volatile and the market is closely watching the economic fallout from Trump’s tariffs.
