The Bitcoin price plunged by 7.2%\u2014from $88,526 to $82,150\u2014within the span of four hours following the reciprocal tariff announcement by US President Donald Trump on Wednesday. The precipitous drop aligns with a broader market rout set off by what has been described as one of the largest tariff packages in modern US history.<\/p>\n
On Wednesday afternoon, markets were jolted by a sweeping set of \u201creciprocal tariffs<\/a>\u201d that President Trump claimed would be levied on 185 countries \u201call at once.\u201d The news sent ripples across global finance, with the S&P 500 futures market reportedly shedding $2 trillion of market capitalization in under 15 minutes.<\/p>\n According<\/a> to The Kobeissi Letter (via X): \u201cReciprocal tariffs are officially HERE: President Trump just announced tariffs on 185 countries AT ONCE, one of the largest tariffs in US history. S&P 500 futures erased -$2 TRILLION of market cap in under 15 minutes. \u201d<\/p>\n The initial press coverage noted a 10% baseline tariff. However, as Trump spoke, the scheme\u2019s complexity and scope became more apparent. He clarified that tariffs would be \u201creciprocal\u201d but set to half of whatever rate another country currently imposes on US goods\u2014a figure well beyond the 10% baseline in many cases.<\/p>\n China, for instance, reportedly applies 67% tariffs on certain imports from the United States, suggesting a 34% tariff reciprocally aimed at Chinese imports. Meanwhile, the European Union could face a 20% tariff. \u201cThis is VASTLY different than a 10% tariff across the board,\u201d The Kobeissi Letter pointed out, adding that these significantly higher rates created massive volatility<\/a>.<\/p>\n At one point in Trump\u2019s announcement, the S&P 500 futures reversed from being up 2% to dropping 4%\u2014an abrupt 6-percentage-point swing in under 20 minutes. By the time the \u201cMake America Wealthy Again Event\u201d concluded, the markets had sustained those losses, with Nasdaq 100 futures indicating a potential 500-point decline from prior levels.<\/p>\n Bitcoin, which was up 8.9% since Monday morning, instantly experienced the same turmoil, shedding 7.2% of its value. Julio Moreno, Head of Research at CryptoQuant, remarked<\/a> via X: \u201cI hope Bitcoiners learn that Trump\u2019s tariffs are a net negative for Bitcoin and the US economy.\u201d<\/p>\n He further elaborated: \u201cTrump has introduced too much uncertainty to the world economy with his tariffs. There\u2019s a high enough chance of recession if the tariffs last long enough. This of course has hit Bitcoin and crypto prices in spite of a positive regulatory environment<\/a> and [the Strategic Bitcoin Reserve].\u201d<\/p>\n While the precise long-term effects remain unclear, several prominent institutions have already issued forecasts.<\/p>\nEconomic Projections<\/h2>\n