Key Insights:
- Rising uncertainty about tariffs is making investors cautious, prompting many to move from crypto into cash or U.S. Treasury. This action could put downward pressure on Bitcoin and other digital assets.
- A stronger U.S. dollar, often reinforced by trade tensions, tends to weigh on Bitcoin, which usually dips when the dollar rallies during risk-off periods.
- Bitcoin miners could face higher costs if tariffs raise the prices of imported ASIC rigs, power infrastructure, or data center equipment, squeezing already-thin profit margins.
On Friday, President Donald Trump announced a 10% global tariffs on all imports, taking effect immediately, just hours after the U.S. Supreme Court struck down his emergency tariffs under the IEEPA.
In a heated White House briefing, Trump called the Court’s decision “ridiculous”. He pledged to move forward with alternative trade measures.
The US President emphasized that existing national security tariffs under Section 232 and trade practice tariffs under Section 301 would remain fully enforced. He signed a new order imposing the 10% global tariff under Section 122 of the Trade Act.
The court had bluntly reminded everyone that only Congress has the authority to set import duties. Its majority opinion noted that in IEEPA’s 50-year history, “no president has invoked [it] to impose any tariffs, let alone tariffs of this magnitude”. It also emphasized that under Article I of the Constitution, tariff power rests with Congress.
Volatile Crypto Market Reaction to Trump Tariffs
Markets edged higher on Friday, but nerves remained. Bitcoin ended the day near $67,700, up about 1.2%. The top altcoin, Ethereum, also rose roughly 1.5% to $1,970. Major altcoins also gained: XRP +1.5%, BNB +3.2%, and SOL +4%, lifting the total crypto market cap to around $2.4 trillion.
Indicators showed a jittery mood. Roughly $180 million of leveraged crypto positions were liquidated over 24 hours on Friday. More than $67.9M of those were in Bitcoin shorts alone.
Crucially, institutional flows pointed downward. Bitcoin spot ETFs saw about $165.8M in outflows and Ethereum ETFs $130M in outflows on the day.
In other words, many investors quietly took some chips off the table. David Hernandez, a crypto fund specialist, observed that this highlights crypto’s hyper-democratic and borderless nature”. Investors seek global hedges when macro uncertainty spikes.
Some retail participants even switched to altcoins, with small inflows into Solana and XRP funds. However, the overall picture was clear: traders were nervous. A market analyst noted that volatility is now “currently elevated relative to levels observed over the past 12 months.”
Risk-On vs Risk-Off: Shifting Sentiment
Tariff news typically sparks risk-off sentiment, and crypto is not immune. In traditional markets, the Supreme Court’s decision briefly sent the dollar lower and U.S. stocks higher, as investors anticipated cheaper imports.
But Trump’s retaliatory tariff talk then bolstered the dollar and pressured stocks. Crypto traders know this dance well: historically, a stronger dollar and safe-haven flow can sap demand for Bitcoin and alts.
Indeed, on Friday, gold and silver rallied to fresh highs on the turmoil. Many crypto investors took a pragmatic view: “protectionist policies that weaken dollar hegemony could accelerate interest in decentralized alternatives over the medium-to-long term,” suggested Marcin Kazmierczak, COO of blockchain platform RedStone.
In other words, some see a silver lining; if the dollar is weakened, it might drive more users to crypto.
Nonetheless, most market-watchers were focused on the near-term fallout. Analysts warned of “renewed confusion” in global markets as they awaited Trump’s next moves. Friday’s court ruling and tariff news reminded crypto investors of last October’s crash, when Trump’s first tariff announcements triggered a massive liquidation.
As one strategist, Denny Galindo of Morgan Stanley, put it, that “flash crash” was like “the pin that popped the leverage bubble.” Many traders worry we could be in for round two: another unwelcome shock to already-thin liquidity.
Miners and Hardware: Caught in the Crossfire
The tariff changes hit hardest those mining and producing the physical hardware. The crypto mining industry is built on a highly centralized supply chain.
Three Chinese firms—Bitmain, Canaan, and MicroBT—currently build over 90% of the world’s Bitcoin mining rigs. Over the past year, U.S. authorities have already slapped roughly 10% baseline tariffs on many imported technologies (and an extra 20% on Chinese equipment).
In response, those Chinese companies have set up factories in the U.S. to dodge duties. But that transition is far from complete.
Many U.S. miners and smaller firms still import the bulk of their machines and components from Asia. As Kadan Stadlemann, CTO at crypto platform Komodo, warned, “U.S. miners will still buy rigs from China and be stung by higher import costs in the short term.”
Others in the industry echoed the point. Guand Yang, CTO of Conflux Network, noted that the trade war is already triggering “structural, not superficial, changes in bitcoin’s supply chains.”
North American mining is booming (about 30% of global mining now occurs here), yet more than 90% of rigs originate from China.
The imbalance leaves U.S. miners feeling vulnerable, especially if tariffs climb further. Every extra percentage point tax on a new ASIC effectively cuts into miners’ already-thin profit margins.
Many small operators, who invested millions in equipment and data center power, now face hard questions: Can they survive even higher costs? For them, it’s not an abstract policy debate but a very real question of jobs and capital.
Industry Voices and Crypto Community
Voices from across the economy painted a picture of mixed emotions. Business leaders outside crypto welcomed the Court’s decision for the certainty it brought.
Steve Lamar, head of the apparel trade association, urged a return to a “predictable and dependable trade policy” to ease the “heavy tariff burden” on American industries and families.
Michael Wieder, co-founder of baby-products maker Lalo, said that while the court simply required a different legal route for tariffs, “we’ve been waiting for this…so it is definitely a good day”. Many hoped for relief.
But the Twitter-verse – and trading chat rooms – quickly filled with second thoughts. Business lawyer Steve Orava noted that in the short term, “uncertainty” was winning out.
Whether pro- or anti-tariff, he said, everyone agreed that certainty around tariff levels is what most businesses need. Crypto executives sounded the same alarm. The sudden whiplash left them exasperated.
A blockchain investor commented, “Every time they say ‘mission accomplished,’ something new comes up. It’s exhausting for those of us building companies.”
From the crypto side, some tried to find a silver lining. David Hernandez of crypto ETF issuer 21Shares observed that crypto’s “hyper-democratic and borderless nature” lets it act as a hedge when national policies collide.
In fact, others in the community began speculating that if tariffs were to weaken the U.S. dollar over time, bitcoin might benefit.
“Protectionist policies that potentially weaken dollar hegemony could accelerate interest in decentralized alternatives,” argued RedStone’s Kazmierczak. It’s a long-term view – but one embraced by some traders betting on Bitcoin as an inflation or instability hedge.
Still, these silver linings offer scant comfort in the trenches. One crypto miner we spoke to (requesting anonymity) summed it up: “We like volatility, but not when it’s politicians playing chess with our livelihoods.”
Crypto at a Crossroads After Court Ruling on Tariffs
For countless users, from day traders glued to price charts to engineers running data centers, the day spelled one more twist in an already wild year. The Supreme Court gave a legal victory to those tired of policy whiplash, but Trump’s quick counterpunch ensured markets must remain on their toes.
Friday’s events left crypto at another crossroads. On one hand, rule-of-law advocates cheered that no branch of government is above the law. On the other hand, markets—especially crypto markets—braced for more whipsaw action. In the end, crypto investors and miners are left balancing fear and hope.
They fear that higher costs and renewed uncertainty could dampen demand. They hope that, in a world of rising economic nationalism, Bitcoin and others can prove their touted value as decentralized alternatives.