The cryptocurrency market experienced significant volatility in early April 2025 mostly due to economic shifts, and political changes on the world stage.
Many experts and investors saw the looming danger of implementing a new tariff policy by the United States, preparing for the crisis and potential crash of the markets. The crypto market was especially hit hard by the extra taxes, leaving investors, particularly small ones, at the mercy of the crashing markets.
Many got liquidated, but some managed to soften the blow or even profit. However, taxes are not the only element that impacts crypto exchanges. The Federal Reserve is closely watching the developing situations ahead of their quarterly statement in June.
Interest rate cuts are expected to calm the inflation, but will it do the trick this time? Speculators and investors have their opinions about it.
The Tariffs
The American president continues to firmly believe that the new tariffs will kick start the American economy, bringing back billions of dollars back into the country.
By imposing such stiff measures, the government believes that the production will come back from China and Southeast Asia to the American people, creating new jobs and reviving domestic manufacturing.
It’s only been a couple of days and the world is still trying to cope with the exceptionally high tariffs, so the claims can’t be proved or denied.
One thing is for sure, the world refuses to sit back and watch the events unfold on their own. Many countries, led by China, announced and implemented retaliation tariffs, essentially triggering trade wars.
The EU agreed to impose 25% of taxes on US imports, while China hit back with 84% of tariffs. Other countries followed suit, and many immediately implemented tariffs equal to or more than what they faced. So, the world came to a standstill. How will the trade move on from this? Is the global market DOA?
Now, the effective U.S. tariff rate on Chinese goods is approximately 145%, covering a wide range of products. This includes a baseline 10% tariff on most imports, with additional levies like a 20% tariff from earlier measures and higher rates tied to specific issues, such as fentanyl-related concerns. In response, China has raised its tariffs on U.S. goods to 125%, signaling a tit-for-tat trade war that’s disrupting global markets.
What’s going to happen with an order from a few months ago? These, and many more questions are worrying business owners who operate from the US while importing all the essential materials and goods.
The online industry also suffered a heavy blow. Millions of people depend on online platforms and social networks to ensure their livelihood. They were stunned to find out that their customers were not willing to compensate for the tariffs by paying higher prices for the same product or service.
Small businesses are hit especially hard with unsustainable new prices, while large enterprises have significant wiggle room to amortize the blow to their bottom line.
Online gaming platforms, particularly crypto casinos that implemented digital coins into their payment policies in order to offer better security and cheaper transactions to their players are feeling the heat from tariff policy. As soon as the taxes went into effect, the markets reacted by taking a plunge to new lows.
Bitcoin dropped to a 5-month low, to only $74,000 from $109,000 in January. Other coins followed, diving into the new depths of the market. ETH is selling for $1,400, and many altcoins went back a few years with the prices counted in pennies.
Not all countries were treated equally. So, how did President Trump figure out how much to charge each one? Well, there’s an explanation for that.
He explained that his administration set tariff rates for individual countries based on the taxes those nations impose on U.S. imports, alongside non-tariff trade obstacles—such as regulations—that hinder American products from accessing foreign markets.
Additionally, the president highlighted that the reciprocal tariffs being implemented remain at just half the rate these countries apply to U.S. goods, referring to his measures as “kind.” Well, I guess foreign governments should consider themselves lucky in that case.
With all being said, how and why did the tariffs affect the cryptocurrencies? That should be a decentralized system completely free of any governments and their laws and regulations, right? Not so much.
It turns out that cryptos are very susceptible to the volatility of other markets, like the Dow Jones index and NASDAQ. Big shifts that impact economies of the giants like China will surely have consequences on stocks, options and futures.
The markets have been interconnected for decades since globalization took off back in the 1980s and 1990s. Still, this wasn’t supposed to hit the crypto exchanges being that they are independent from local regulations.
However, in recent years, the adoption of Bitcoin and other major cryptos has become widespread with some companies switching their payment policies to cryptocurrencies. Even some car manufacturers adopted crypto; major online casinos started using crypto in megaways slots and table games, with even small businesses jumping on the opportunity.
Now, with the tariffs, markets were thrown off the balance, and prices took a dive. Bitcoin lost around 28%, reminding us of the post-pandemic crisis in 2022, when it went from $60,000 to around $22,000. Frequent changes are nothing new in the crypto world, but this is way more than just the usual price drop.
The future is uncertain since no one can tell for sure what are the long-term consequences of such policies. This fear continues to drive the prices down with the occasional rebounds. It’s only been a few days since the tariffs took effect, but the effects might be far reaching.
The Federal Reserve
Back in January, the wide adoption of Bitcoin was welcomed by investors and speculators deemed as a step forward in accepting all digital coins as a form of payment, and savings. There were some talks about the Federal Reserve considering making Bitcoin part of the strategic reserve.
U.S. President Donald Trump has signed an executive order establishing a strategic cryptocurrency reserve utilizing tokens currently held by the government.
A U.S.-supported cryptocurrency reserve could have provided much-needed clarity in the digital asset space, particularly regarding which government agency would oversee cryptocurrency regulation.
Proponents argue that cryptocurrency reserves could have reduced the national debt, freed up U.S. dollars for other uses and positioned cryptocurrencies as long-term financial assets.
On the other hand, Bitcoin holders were looking forward to stability, reliability and raised faith in the future of cryptocurrencies. BTC’s strategic reserve was supposed to come from illegal activities that the federal government seized.
Also, the U.S. Department of Justice announced the termination of its National Cryptocurrency Enforcement Team. The new directive focuses on investigating criminal activities involving digital assets, such as terrorism financing and organized crime, rather than pursuing regulatory violations by cryptocurrency platforms.
This move aligns with the Trump administration’s broader support for the cryptocurrency industry and a shift towards a more lenient approach.
For the time being, the only reserve will be the Bitcoin already owned by the US government, while leaving the door open for future purchases.
And then, just a few months later, Bitcoin dropped like a rock. It remains unclear whether or not the government purchased any coins during the dip with all the coin tzars keeping their lips sealed.
Did Bitcoin Hit the Bottom?
The price of digital coins is driven by speculations and predictions. So, after many days of contradictory information coming from all sides, where do we stand today?
First, the good news. Bitcoin, along with the S&P and other stock markets continues to crawl its way back to the top. This market movement directly followed President Donald Trump’s decision to implement a 90-day pause on broad global tariffs.
As a result, crypto-related stocks experienced notable gains in the most recent trading session, with Michael Saylor’s Strategy jumping 24.76% to finish at $296.86, and crypto exchange Coinbase (COIN) climbing 17% to close at $177.09.
Crypto mining firms also rallied, as MARA Holdings (MARA) climbed 17%, Cipher Platforms (CIFR) rose 16.59%, and Riot Platforms (RIOT) gained 12.77%.
The majority of gains in crypto stocks and the broader U.S. market occurred during the final three hours of trading, driven by an afternoon post from Trump on his social media platform, Truth Social.
The original plan was to lower tariffs to 10 for everyone except China which got 125% taxes on exports to the US, but the president decided to abandon that strategy and stuck with the originally assigned taxes.
It took a few hours for the buzz to quiet down since speculators saw their chance to stir the pot even more by claiming that the pause on tariffs was fake news, keeping the prices low and dropping.
While some watched long red bars wiping away their accounts, the whales kept purchasing coins at prime prices. Around April 1, the whales’ Accumulation Trend Score momentarily reached a perfect 1.0, signifying a 15-day buying surge—the strongest since late August 2024.
Since March 11, whales have steadily accumulated an additional 129,000 BTC with a current score of 0.65. In contrast, smaller investor groups (holding less than 1 BTC up to 100 BTC) have transitioned toward distribution, reflected by lower scores between 0.1 and 0.2 throughout most of 2025.
This overall trend coincides with Bitcoin finding robust support around the $74,000 mark, a price level further backed by more than 50,000 BTC accumulated by investors.
Price Predictions for BTC and ETH
The internet is scorching with predictions with speculators and investors expressing some wild numbers. It’s well known that Bitcoin dictates the prices of all other digital coins on the market, so by predicting its price we can see the possible development of every crypto currently on the market.
As far as BTC, some forecasts suggest that it could experience further declines, potentially dropping to between $52,000 and $56,000 by the summer due to ongoing economic pressures and trade tensions. The last time we saw Bitcoin in this range was about a year ago, in February 2024.
This would mean that BTC has not hit the bottom as of today, and the worst is yet to come. This does not align with what we see on the market. Why would whales accumulate huge amounts of BTC if the price is about to drop another 25%?
Also, the Feds are looking to cut interest rates in an attempt to slow down the raging inflation, which will possibly drive the price of cryptos up. Besides, three days after the tariffs went into effect, the prices stabilized and began to slowly rise. When everything is put together, it seems that it’s unlikely that the prices will continue this trend.
However, some analysts maintain an optimistic outlook, forecasting that Bitcoin may rise to between $180,000 and $200,000 by the end of 2025, supported by factors like its limited supply and growing institutional interest.
This seems a bit too extreme, since the supply was always capped at 21 million BTC, and the institutions halted their processes to implement cryptocurrencies into their systems due to the recent high volatility and plunging prices.
If this was true, BTC would have to double in price which seems unlikely but not impossible. A steady ascend could bring Bitcoin close to $200K by the end of the year only if it manages to absorb any aftershocks from the tariffs.
Predictions for ETH also vary. On April 7, ETH’s price declined to $1,453, an 8.2% drop, coinciding with the broader market downturn. Two days later ETH experienced a rebound, rising to around $1,650 following the announcement of the tariff pause.
Some forecasts indicate a potential rise to around $2,157 by the end of April 2025. Others suggest that ETH could reach as high as $10,000 by 2025. Both predictions are a bit out there.
First of all, ETH is closely connected to Bitcoin tagging along up and down. So, there is nothing that can boost Ethereum in the next few months except the rise of Bitcoin.
There were some spikes in price in the past, like in the springtime last year when everyone expected ETH to skyrocket due to the ETF, but after a brief rise, Ethereum dropped during the summer of last year.
This only proved that no matter what happens with ETH, Bitcoin will always override the price. The summer of 2024 was completely bearish, with even BTC falling to around $56,000.
Last week’s events shook the whole world while emphasizing the connection between nations. Major changes are affecting the whole world, not just the nation it comes from. While the politicians plan their next big move, investors should remain vigilant, considering both the potential risks and opportunities in the current market.
