Bitcoin and Ether fell sharply during early Asian hours on Wednesday as fears of a prolonged US-China trade war deepened, with investors bracing for President Donald Trump’s sweeping new tariffs to take effect.
Crypto markets, like equities, reacted to mounting uncertainty, with any hopes of a near-term tariff concession fading fast ahead of a looming deadline.
Bitcoin dropped 5.6% to $75,523 while Ether slid 10.7% to $1,417. The broader cryptocurrency market also came under pressure, with total market capitalization falling 7.2% to $2.4t in the last 24 hours, despite scattered gains in some altcoins.
Investor confidence weakened further after the White House confirmed on April 8 that the US plans to raise tariffs on Chinese goods to 104%, following Beijing’s pledge to retaliate against the move.
The tariff situation showed a brief period of brightness today, as Bitcoin reached $80.2K again and the S&P 500 started up on the day by ~+4%. However, no notable positive progress has been announced on tariff negotiations. Developments of note:
Bitcoin is back down to… pic.twitter.com/OrNEmJhBJH
— Santiment (@santimentfeed) April 8, 2025
Tariff Escalation Hits Stocks as Crypto Tracks Broader Market Moves
The tariff tensions rattled traditional markets as well. All three major US stock indices ended Tuesday in the red, with the S&P 500 closing below 5,000 for the first time in nearly a year.
“With Trump threatening a further 50% tariff on China and Beijing refusing to back down, sentiment could turn quickly,” Lukman Otunuga, senior market analyst at FXTM, said. “Markets are walking a tightrope — any escalation could see risk aversion return with full force.”
Since Trump unveiled the global tariff framework last Wednesday, S&P 500 companies have lost a staggering $5.8t in market value, marking the index’s worst four-day drop since its inception in the 1950s, according to LSEG data.
Trump’s shifting rhetoric has added to the volatility. He has described the new tariffs as “permanent,” yet simultaneously claims they are forcing leaders to seek negotiations. This mixed messaging has fueled uncertainty across global markets, leaving investors unsure of what comes next.
While cryptocurrencies are often seen as uncorrelated to traditional financial systems, recent trends suggest otherwise. In times of broad market stress, Bitcoin and Ether have increasingly mirrored the movement of tech stocks and broader indices. This correlation is particularly evident during risk-off periods when investors retreat from volatile assets across the board.
Inflation Report Adds to High-Stakes Week for Markets Under Pressure
Market participants are now turning their attention to Thursday’s US Consumer Price Index (CPI) report, which could further shape risk sentiment.
“A CPI reading above 3.4% could compound market concerns about persistent inflation,” said Marcin Kazmierczak, co-founder and COO of RedStone. Such an outcome may trigger another wave of equity and crypto selloffs as traders scale back expectations for near-term rate cuts, he added.
Conversely, a softer CPI reading, below 3.2%, could provide a brief reprieve, according to Kazmierczak. It might dampen inflation fears and cushion the blow from trade tensions, potentially lifting both equities and crypto.
Bitcoin, which held up better than Ether in recent days, could benefit from this scenario, bolstering views that its market behavior is beginning to diverge from traditional risk assets during episodes of macro uncertainty.
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