By Ben Strack, Blockworks; Compiled by Tao Zhu, Golden Finance
After imposing a 25% tariff on steel and aluminum imports on Monday, Donald Trump is expected to impose corresponding tariffs on other trading partners.
Bitcoin fell to around $95,000 after the news of the steel/aluminum tariffs, and then rebounded to above $98,000 in early trading on Tuesday.
"This rapid recovery highlights the growing maturity and stability of digital assets, even in the face of external economic shocks," Matt Mena, 21Shares cryptocurrency research strategist, said in an email.
He noted that during the previous weekend when Canada and Mexico announced tariffs, cryptocurrency prices fell about 5-10% from yesterday's levels - indicating "increased market confidence."
Indeed, U.S. markets were "strong" late yesterday, Matt Britzman, senior equity analyst at Hargreaves Lansdown, said in a note on Tuesday morning ET. Still, he noted that the tariffs have investors "brace themselves for the impact, with futures falling this morning."
History shows that trade war fears sparked by tariff threats tend to come and go quickly, Britzman added.
"But this time, smart money isn't so sure; currency, bond and commodity traders are hedging their bets, with the dollar, Treasury yields and gold prices climbing as tensions heat up," he explained.
Joel Kruger, currency strategist at LMAX Group, believes the story is more about markets reacquainting themselves with Trump’s tactics than any substantive risk associated with extreme tariff measures.
“While there could be some short-term volatility from the new announcement, we do not see this risk as causing any major shocks from here on out and expect crypto assets to continue to be well supported by medium- to long-term players looking to buy on dips,” he told me.