“Black Monday” in Global Markets? The Impact of Trump’s Tariffs on Cryptocurrency and Stocks
President Donald Trump’s announcement and implementation of new global tariffs have triggered significant volatility and a downturn in global financial markets, affecting both stock and cryptocurrency assets. Investors worldwide are expressing concerns about a potential trade war and an impending recession.
Stock Market Crash
Following President Trump’s introduction of restrictive global tariffs, the U.S. stock markets experienced their worst decline since 2020. The Dow Jones Industrial Average showed a sharp two-day drop [see source providing this information]. Market commentator Jim Cramer warned that America could face another “Black Monday” style market crash, comparable to the record collapse of 1987, if President Trump does not adjust his tariff plan. Cramer noted that during the 1987 crash, the Dow Jones Industrial Average fell by 22.6% in a single day. The unprecedented decline also affected Asian markets, with Japan’s Nikkei 225 plummeting by 8.9% in early Monday trading, and Taiwan’s Taiex index collapsing by nearly 10%, triggering circuit breakers on giants like TSMC and Foxconn.
Concerns about the tariffs have fueled fears of a global trade war, leading to a sell-off of risk assets worldwide. Global stocks lost $7.46 trillion in market value in the two sessions following the tariff announcement. The U.S. stock market alone lost $5.87 trillion during these two sessions. President Trump announced a 10% blanket tariff on all imported goods into the U.S., with higher duties against major exporters such as China, the European Union, Japan, and Vietnam set to take effect later. This announcement, unofficially dubbed “Liberation Day”, led to substantial market losses, with the Dow dropping by 3,910 points in the two days after.
Experts warned that if the mass market sell-offs continue, the U.S. could face a recession. Apollo chief economist Torsten Slok suggested that a recession could occur if the tariffs remain in place for several months and other countries retaliate. Major technology companies, the so-called “Magnificent 7,” suffered significant losses, with Tesla leading the decline. It was reported that Nancy Pelosi’s fortune decreased due to her investments in tech companies heavily affected by tariff concerns. However, some investors, like Warren Buffett, conversely increased their wealth during this period. Retail investors withdrew a record volume of funds from equities, highlighting the depth of fear in the market. Despite the market slump, President Trump remained optimistic, believing that the tariffs would lead to long-term economic benefits. Treasury Secretary Scott Bessent attempted to downplay recession fears, stating that the administration is working for the long term. Bessent later suggested that the market issues are more related to the “Magnificent 7” tech stocks and the artificial intelligence bubble linked to DeepSeek, rather than Trump’s tariffs.
Cryptocurrency Market Downturn:
Bitcoin fell below $80,000 as cryptocurrencies joined the global market sell-off. According to Coin Metrics, by 5:11 a.m. ET, the price of Bitcoin had decreased by approximately 4% to $76,221, after trading above $80,000 for most of the year. This decline triggered a wave of long liquidations, with over $247 million in Bitcoin longs liquidated in the past 24 hours, according to CoinGlass. Other cryptocurrencies also experienced significant losses, with Ether and the token tied to Solana falling by around 8% and 6% respectively. On what was being called “Black Monday,” the total liquidations in the cryptocurrency market exceeded $1.36 billion in the past 24 hours. The drop was led by Bitcoin (BTC), which fell to nearly $75,000, causing a cascade of forced liquidations across the market. Over $1.2 billion in long bets were liquidated, with Bitcoin longs accounting for more than $392 million in losses. Ether traders also lost close to $328 million.
While Bitcoin usually trades like big tech stocks and is often seen by traders as a leading indicator of market sentiment, it had defied the broader market meltdown in the past week. However, the current drop indicated that the cryptocurrency market was following global stock markets after the introduction of Trump’s tariffs. Some analysts expect Bitcoin to continue moving in tandem with equities as global recession fears overshadow positive developments in cryptocurrency regulation. Geoff Kendrick from Standard Chartered suggested that Bitcoin could become a hedge against tariff risks, arguing that U.S. isolationism is akin to increased risks of holding fiat currency, which could ultimately benefit Bitcoin.
U.S. Treasury Secretary Scott Bessent called Bitcoin an emerging “store of value,” comparing it to gold. This statement came as Bitcoin’s price showed “notable resilience relative to equities”. David Hernandez, a crypto investment specialist at 21Shares, noted that Bitcoin’s price action demonstrated its potential for uncorrelated returns and its investment significance as an emerging store of value. He also highlighted that Bitcoin had outperformed the “crashing” stock market. Joe Burnett from Unchained noted that Bitcoin had not made new lows since March 11th, which could signal a strategic entry point for long-term investors, although he cautioned that further stock market declines could still negatively impact Bitcoin.
Wrap up:
President Trump’s tariffs have caused significant volatility and a downturn in global financial markets, encompassing both stock and cryptocurrency markets. While some experts express serious concerns about a potential recession and market crash, others remain optimistic about long-term economic prospects and the potential for assets like Bitcoin to act as a hedge amidst this uncertainty.
Ressources:
- Bitcoin drops below $80,000 as cryptocurrencies join global market rout
- CNBC host Jim Cramer warns of ‘Black Monday’ market crash over Trump tariffs rivaling record 1987 collapse
- Stock Market Crash, why is the stock market crashing today
- U.S. Treasury Secretary Declares Bitcoin A ‘Store Of Value’ To Rival Gold — As Its Price Beats Trump’s ‘Crashing’ Stock Market
- Crypto Liquidations Surpass $1.3B as Markets Continue to Crash on ‘Black Monday’
