A fierce new chapter of U.S. economic nationalism is shaking the global financial system—and the crypto world is feeling the aftershocks.
Since President Donald Trump’s return to the Oval Office, the administration has launched the most aggressive tariff campaign since the Great Depression, making good on promises to reset America’s trade balance. On April 2, 2025—dubbed “Liberation Day” by White House officials—the U.S. imposed a sweeping round of “reciprocal tariffs,” setting off a cascade of retaliation from major economies like China and the EU. By April 10, more than $10 trillion in global market value had evaporated. Nearly $1 trillion in crypto market capitalization has also been lost.
The impact has been staggering. A Binance Research report titled Tariff Escalation and Crypto Markets: Impact Analysis notes that total crypto market capitalization has plunged 25.9% since January, closely tracking declines in traditional equities and underscoring the deepening link between digital assets and global economic sentiment.
“Crypto is behaving more like a traditional risk asset than ever before,” says the report. “In this high-uncertainty environment, capital is retreating from speculative sectors and flowing toward safe havens like gold.”
Indeed, as Bitcoin (BTC) fell 19.1% and Ethereum (ETH) sank over 40%, gold has surged to record highs, rising 10.3% since February. The split reflects how investors are rethinking crypto’s relevance in an era of economic protectionism and rising stagflation fears.
“The resurgence of trade protectionism is introducing significant volatility across global markets — and crypto is no exception. In the short term, this kind of macro uncertainty tends to trigger a risk-off response, with investors pulling back as they wait to see how things unfold around growth, policy, and trade,” notes Binance’s CEO, Richard Teng. “Looking further ahead, though, this environment could also accelerate interest in crypto as a non-sovereign store of value. Many long-term holders continue to view Bitcoin and other digital assets as resilient during periods of economic stress and shifting policy dynamics.”
The tariff shock heard around the chain
Trump’s new tariffs represent an economic rupture unseen in nearly a century. The average U.S. tariff rate has surged from 2.5 per cent in 2024 to between 18.8 per cent and 22 per cent in 2025, depending on the estimate. For context, that’s comparable to levels seen under the 1930 Smoot-Hawley Tariff Act, which infamously deepened the Great Depression.
The April 2 proclamation included a 10 per cent blanket tariff on all imports, layered with even steeper country-specific duties: 54% on Chinese goods which Trump has since raised to 125%, 20 per cent on EU exports, 24% on Japanese imports, and a staggering 46% on Vietnamese products.
While Canada and Mexico had already faced 20 per cent tariffs earlier in February, other nations swiftly retaliated. China struck back with its own 34 per cent tariff on all U.S. imports, and Canada imposed a 25% blanket duty.
These developments have jolted crypto markets into a state of high alert. As trade tensions rose, the report shows, Bitcoin’s price swings intensified—culminating in one of its sharpest one-day drops since the COVID-19 crash of 2020. Volatility, particularly for Ethereum, spiked to above 100%, from a pre-crisis level of around 50%.
Risk-off, chain-off
The broader crypto retreat has upended the narrative of digital assets as inflation hedges or safe havens. In February, just 3% of fund managers surveyed by Bank of America favored Bitcoin in the event of a trade war, compared to 58% who backed gold.
While Bitcoin has historically shown resilience after macro shocks, its current alignment with equities indicates it may no longer be decoupled from traditional markets. Binance’s research shows BTC’s 30-day correlation with the S&P 500 rose from –0.32 in February to 0.47 by late March. Meanwhile, its correlation with gold turned sharply negative, hitting –0.22 in April.
In practical terms, this suggests investors no longer view crypto as a diversifier in turbulent times—but rather, as an extension of risk markets vulnerable to macro shocks.
Beyond price volatility, the bigger worry now looming over digital assets is stagflation: a dreaded blend of slow growth and high inflation. The new tariffs, effectively taxes on imports, are expected to drive up prices across industries—just as the Federal Reserve had been making progress in cooling inflation.
According to the Binance report, market-based inflation expectations have shot past 3%, with consumer surveys nearing 5%. At the same time, growth forecasts are slumping. Fitch Ratings estimates the global economy could lose up to $1.4 trillion in output if the full tariff regime persists, with U.S. real GDP per capita projected to fall by nearly 1%.
“The tariffs announced in recent weeks are larger than expected,” Fed Chair Jerome Powell said on April 4, “and their economic effects—particularly on inflation and growth—will need to be closely monitored.”
Markets have begun pricing in up to four interest rate cuts this year, reversing earlier expectations of tightening. But the Fed faces a treacherous balancing act. Cutting rates too quickly could fan inflation; waiting too long could deepen the downturn.
The future
Despite the turmoil, the crypto market may yet find its footing. History has shown that Bitcoin’s correlation with traditional assets often fades after periods of stress. But in the short term, uncertainty reigns.
“We are witnessing a macro reordering,” says the report. “Trade policy, not blockchain fundamentals, is now the dominant driver of crypto performance. That’s a new paradigm for this market.”
There are glimmers of hope. Analysts believe this correction could purge the market of speculative excesses accumulated during the 2024 bull run, clearing the way for more sustainable growth.
Binance has partnered with Worldpay to enable users to easily purchase crypto via Apple Pay and Google Pay. With this integration, Binance users can now make fiat-to-crypto purchases through these popular mobile payment methods, offering more accessibility and convenience for users to enter the crypto space.
“Worldpay is recognized as one of the world’s leading eCommerce Payments companies and is a natural collaborator for Binance to provide Apple Pay and Google Pay to users — delivering greater choice and accessibility for crypto purchases with some of the most popular mobile payment options,” said Thomas Gregory, VP of Fiat at Binance.
Analysts also argue that the current crisis could reignite interest in decentralized finance (DeFi) as users look for alternatives to fragile fiat ecosystems rattled by geopolitical risk.
