The unexpected tariff declaration by President Donald Trump has shocked the global market, causing Bitcoin to drop below $108,000 and creating a widespread risk-averse sentiment.
The new tariff moves not only affected diplomatic relations but also triggered a sharp decline in both stock and cryptocurrency markets, demonstrating that Bitcoin is reacting like a risky asset rather than a safe haven.
- President Trump's new tariffs caused Bitcoin to decline and global markets to panic.
- Bitcoin prices dropped in line with stock markets, revealing the risky nature of cryptocurrencies.
- Delayed tariff deadlines and new warnings from BRICS increased uncertainty for investors.
How Did Bitcoin React to US Tariff Threats?
Bitcoin immediately dropped below the $108,000 threshold on July 7th after President Donald Trump reignited trade war concerns with import tariffs as high as 40% on many allied countries.
Trump applied 25% tariffs on goods from Japan and South Korea, then expanded to Malaysia, Kazakhstan, and South Africa. These measures disrupted global investor confidence, causing Bitcoin - considered a risky asset - to plummet similar to highly volatile tech stocks. At the time of reporting, Bitcoin had slightly recovered, trading at $108,899.
How Did Stock and Cryptocurrency Markets Simultaneously Fluctuate?
As soon as the tariff information was announced, the market reacted strongly. The S&P 500 closed with a deep red candle, and Bitcoin also correspondingly declined, showing a simultaneous risk sell-off across multiple asset types.
Japanese automotive stocks like Toyota and Honda plummeted due to fears of trade retaliation. The USD strengthened significantly against the yen and won, reflecting an investment trend seeking safe havens amid instability.
"Bitcoin now demonstrates a role more as a global risk indicator than a risk mitigation tool."
Investment Director at XYZ Financial Fund, July 2025
Why Are Markets Still Anxious Despite Tariff Deadline Postponement?
Although the tariff deadline was postponed to August 1st according to Press Secretary Deputy Karoline Leavitt, markets remain tense. This move left investors uneasy due to the uncertainty and lack of clarity in the US trade strategy.
Finance Minister Scott Bessent attempted to reassure, emphasizing that President Trump focuses on trade deal quality over quantity, but prolonged uncertainty has kept markets in a waiting and cautious state.
"We are committed to creating a trade balance beneficial to the US while taking time to establish fair agreements."
Karoline Leavitt, White House Press Secretary Deputy, 8/7/2025
How Do New Tariffs Affect Bitcoin Compared to Other Assets?
Bitcoin is no longer seen as a safe haven, instead reacting exactly like risky assets such as tech stocks. Simultaneously declining with the S&P 500 demonstrates Bitcoin's high correlation with global investor sentiment.
| Asset | Reaction to New Tariffs | Volatility Trend |
|---|---|---|
| Bitcoin | Sharp decline, below $108,000 | High volatility, consistent with stock market |
| Tech Stocks (S&P 500) | Deep decline with strong red candle | High volatility, impacted by trade risks |
| USD | Strengthened against yen and won | Capital flow seeking safe havens |
What Do Experts Say About the Current Situation?
US Finance Minister Scott Bessent emphasized: "Trade deal quality matters more than tariff deadlines. However, investors are currently in a cautious state due to potentially sudden policy changes." (7/2025)
Assessment from financial expert Emily Tran at the Market Research Institute shows that Bitcoin quickly reacts to geopolitical and trade-related news, no longer just an investment risk mitigation tool, but effectively becoming a risky asset in global investors' eyes.
Frequently Asked Questions
- Is Bitcoin a Safe Haven Against Tariffs?
- Bitcoin currently reacts like a risky asset, dropping in price when tariff news emerges. This is not a traditional safe haven option.
- Why Does Bitcoin Drop Simultaneously with Stocks?
- Synchronized volatility shows Bitcoin is strongly linked to global risk sentiment, not independent like a safe haven asset.
- Does Tariff Deadline Postponement Reduce Pressure?
- The postponement creates negotiation time but does not reduce risk concerns due to unclear policy.
- How Does the USD React to Tariff Threats?
- USD strengthens as investors seek safety amid escalating trade tensions.
- How Should Cryptocurrencies Be Evaluated in the Current Market?
- Cryptocurrencies have high volatility, are influenced by geopolitical factors, and require caution when investing.
