Risk assets such as Bitcoin (BTC), XRP, and Solana (SOL) are once again in the spotlight as former President Donald Trump issued a stern warning regarding the potential for increased reciprocal tariffs. In a post on Truth Social early Thursday morning, Trump cautioned that if the European Union collaborates with Canada to inflict economic harm on the United States, there would be significant tariffs imposed—much larger than those currently in place. He emphasized his commitment to protecting what he referred to as the "best friend" that both countries have ever had, hinting at a tough stance on trade relations.
In his message, Trump declared, "Liberation day in America is coming, soon," while lamenting that the U.S. has been "ripped off" by nearly every country globally, both allies and adversaries. This bold statement comes just days after reports suggested that concerns about tariffs may have been overstated, with analysts indicating that the overall impact could be more measured than initially feared.
Earlier this month, Trump enacted a 25% tariff on imports from Canada and Mexico, alongside a 20% levy on Chinese goods, citing national security concerns linked to immigration and fentanyl trafficking. With the EU and Canada now in his crosshairs, markets may be bracing for further volatility. Tariffs inherently disrupt economic stability, leading to higher costs for imported goods, fueling inflation, and pressuring central banks like the Federal Reserve to adopt tighter monetary policies.
Such developments could pose significant challenges for BTC and other cryptocurrencies in the short term, as the crypto market frequently mirrors the performance of equities, which tend to decline amidst trade uncertainties. A stronger U.S. dollar, bolstered by capital flows driven by tariffs, could further suppress BTC prices as investors seek refuge in safer assets like gold or cash.
Trump’s post dampened the previously bullish sentiment in markets during the Asian trading hours, resulting in a brief sell-off. XRP and SOL experienced declines of 2%, while Ether (ETH) and BNB Chain's BNB remained relatively stable. Additionally, Dogecoin (DOGE) retraced gains from a notable 3.5% rise in the previous 24 hours.
In contrast to the top ten tokens by market capitalization, Sui Network's SUI demonstrated resilience, posting a robust 7% surge ahead of the launch of the Walrus Network—a data availability protocol built on Sui—going live later on Thursday. Analysts have noted that developments in Asia could serve as a catalyst for Bitcoin prices, despite the turbulent U.S. landscape.
As U.S. regulators begin to ease restrictive policies, institutions in Asia are making significant strides by launching new funds, products, and innovations supported by pro-crypto regulations in key markets. Jupiter Zheng, a partner at HashKey Capital, shared insights via Telegram, suggesting that the next phase of the bull market may find its foundation in Asia, positioning it as a growth hub for the cryptocurrency industry.
In a more optimistic tone, BTSE's Jeff Mei expressed confidence regarding the recovery of Bitcoin and other cryptocurrencies, noting that they have rebounded over the past few days, even as stock markets reacted negatively to Trump's announcement of auto tariffs. This recovery could signal that the worst may be behind the crypto markets this year, with potential for an upward price trajectory as U.S. inflation fears ease and the prospect of interest rate cuts comes closer.
