According to Reuters, President Donald Trump’s duties for products from Mexico and Canada will be enabled on March 1. It has not been officially confirmed yet, but it is expected that the proposed 25 % tariff will have a significant impact on a wider economy, including the cryptocurrency market.
“Kadan Stadelmann, a CTO of Komodo Platform,” “Bitcoin, which is considered to be a hedging for inflation or economic instability, may experience the growing volatility as investors respond to new tariff policies.
First, dramatic changes in tariff policies are expected to introduce economic uncertainty and unstable both the conventional asset market and the digital asset market.
Some analysts suggest that the increase in correlation between S & P 500 and cryptocurrency is likely to have a high possibility that the digital asset market will experience the same volatility as the conventional market. I am. In particular, bitcoin is increasingly treated like a risk -on asset, and its value is rising often along with conventional financial markets.
This is the most obvious method in which Bitcoin and traditional stocks move together during the economic turbulence period. For example, in the fall of last year, geopolitical tension increased in the Middle East, causing a decrease in bitcoin value, but Spot Bitcoin ETF recorded a major outflow.
Similarly, during the pandemic of COVID-19, bitcoin has a higher correlation with the stock market, and the price of the world’s largest cryptocurrencies is moving regularly in the economic stress with the US stock market. Ta.
The possibility of turmoil is continuing to increase as tariffs threaten the traditional and digital asset market in the next few weeks. In the past, both Bitcoin and Bitcoin Exchange Fund (ETF) saw significant losses and liquidations in the market uncertainty. If the proposed tariffs in Mexico and Canada become enabled, this trend may continue.