U.S. President Donald Trump announced plans on May 23 to impose a massive 50% tariff on all European Union imports starting June 1. Frustrated by what he called “unproductive” trade talks and a ballooning trade deficit, Trump declared, “Our discussions with them are going nowhere!”
The reaction was immediate. Global markets slipped, and crypto was not spared. Bitcoin price shed around $3,000 in minutes, dragging the entire crypto market down with it. Nearly $80 billion was wiped off the board as the global crypto market cap fell roughly 2.6%.
Traditional markets also felt the tremors. European indices like the STOXX 600 took a sharp dip, U.S. stock futures dropped, and the euro lost ground against the dollar. Investors began pulling away from riskier assets.
The tariff threat also shook up tech stocks. Apple, for instance, saw its shares fall 3.66% in premarket trading. The drop followed Trump’s mention of a 25% tariff on iPhones not made in the U.S.
Bitcoin Price Takes a Hit After Setting New High
Yesterday, May 22, Bitcoin hit a new all-time high of $111,970. But the celebratory mood did not last. After Trump’s tariff threat, the price dropped nearly 3% within the hour, falling to around $108,353 at the time of writing.
Analysts point to a clear shift in investor sentiment. When geopolitical tension rises, especially involving economic superpowers, investors often rotate out of high-volatility assets like Bitcoin into safer bets. The fear is that tariffs like these could slow global trade and growth, which does not bode well for speculative markets.
Other major cryptocurrencies were not spared either. Ethereum, Solana, XRP, and Dogecoin, BNB all slipped into the red. Ironically, President Trump’s own meme token, $TRUMP, was one of the hardest-hit assets, plunging over 15% in just 24 hours. It is trading around $13.99, down from a daily high of $15.87.
What This Means for Crypto in the Short and Long Term
This kind of volatility is not new to crypto. The market is known for knee-jerk reactions to global news, and this market reaction is a textbook example. While short-term market fluctuations are expected, many analysts believe the long-term outlook for Bitcoin remains intact.
Some argue that if global inflation creeps up or supply chains tighten, investors might return to Bitcoin as a hedge, but they are unlikely to do so amidst a policy bombshell like this.
For now, however, traders are bracing for rougher seas. As the market digests what a 50% tariff on EU imports means for global trade, risk appetite may stay low across all asset classes, especially in the cryptocurrency market.
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