The first week of Q2 2025 witnessed bloodshed in global capital markets. Both traditional finance and the cryptocurrency markets witnessed the ripple effects of uncertainties associated with the US tariff announcements. In this edition of the Crypto Market Monitor, we take a look at the price swings and surge in volatility in the current cryptocurrency market caused by the recent news coming out from the US and the way forward keeping in mind this macroeconomic headwind.
The Rollercoaster
On 3 April, US President Donald Trump announced new import taxes (starting April 9) on all goods entering the US. The duties announced were in addition to a baseline reciprocal tariff of 10%. Markets reacted swiftly. BTC dropped to $82,480 (-4.4%), ETH fell to $1,797 (-5.3%) and the total crypto market capitalisation declined to $2.65 trillion (-4.7%).
However, on April 9, just hours after the levies kicked in, the US President took a dramatic U-turn in announcing a 90-day pause on the same tariffs. This was for all but China. Currently, US’ tariff on Chinese goods stands at 125% while China’s tariff on US goods stands at 84%.
Despite the clearly ongoing economic tussle between the countries, major stock indices saw a brief recovery following the tariff pause announcement. NASDAQ gained 12.16% while the S&P500 climbed 9.53%. Meanwhile, BTC gained 8.17% to reach $83K and ETH rose 13.43% to $1.67K.
What Comes Next? Three Possible Paths Forward
With global trade and macroeconomic policies on uncertain footing, crypto markets face a critical juncture. The coming months may be shaped by one of the following scenarios:
Scenario 1: Tariff Truce or Softening
If diplomatic channels prevail, leading to a rollback or easing of tariffs, a swift rebound across financial markets could follow. Crypto is known for its high-beta behaviour. It may outperform other asset classes in a risk-on environment, fueled by renewed investor confidence and capital inflows.
Scenario 2: Escalation into Prolonged Trade War
If tensions between the US and China escalate into a drawn-out trade war, the global economy may shift into risk-off mode. While this could lead to broad market pullbacks, it may also revive crypto’s original appeal as a decentralised hedge against fiat debasement, political instability, and government overreach.
Scenario 3: Regional Reordering of Crypto Power
As the US-China economic divide deepens, nations like the UAE, Singapore and members of the European Union may double down on positioning themselves as neutral, crypto-friendly jurisdictions. This could drive the redistribution of mining operations, infrastructure projects, and developer talent, thereby reshaping the geopolitical map of digital assets.
US Miners Face a Structural Shakeup
While the tariffs have been paused for a 90-day period for now, the crypto mining industry may be staring down a longer-term challenge.
Between April 3rd and the tariff pause announcement, mining companies were working overtime to pull forward ASIC orders. This was in an effort to front run the announced tariffs which were to take effect on April 9th.
If diplomatic talks fail and the tariffs makes a comeback, it imposes steep levies on imports from nearly 90 countries, including major mining rig exporters like Thailand, Indonesia and Malaysia. These new duties are dramatically shifting the cost structure for US-based mining operations. This could lead to a divergence in equipment pricing for the US: while machine prices decrease in the rest of the world, they will rise in the US.
Rig makers like Bitmain, MicroBT, and Canaan who had relocated operations to Southeast Asia to avoid earlier 25% tariffs on Chinese goods in 2018 now find these very regions caught in the latest crosshairs. Unsold inventory originally bound for the US may now be dumped at discounts abroad, giving international miners a clear cost advantage.
As a result, non-US mining operations may scale up, gradually increasing their share of Bitcoin’s global hashrate. While the US. currently contributes nearly 40% of the network’s power, this edge may fade.
Ironically, many US miners had welcomed Trump’s return, hoping for regulatory clarity and a pro-mining stance. Instead, they are now confronting the volatile flipside of policy unpredictability and reassessing whether the US. remains a viable long-term base for crypto mining leadership.
Conclusion
The first week of Q2 2025 has emerged as more than just a bout of short-term volatility. It may well be remembered as the inflection point that redefined the crypto industry’s geopolitical and economic landscape. The sweeping US tariffs, coupled with China’s aggressive response, have injected new layers of complexity into both traditional and digital markets.
While price swings dominate the headlines, the deeper story lies in shifting power centres and disrupted supply chains. Whether this moment catalyses a resurgence in decentralisation or deepens fractures across jurisdictions will depend on how governments, builders and investors respond in the weeks ahead.
Trade wars are a reminder that, at the end of the day, countries tend to act in their own self-interest, sometimes in ways that are more emotional and tribal than purely rational. In moments like these, crypto starts to feel more relevant. It offers a way for individuals to truly own their assets and operate outside the usual systems of tariffs and trade barriers.
Bitcoin has often been described as a hedge against global uncertainty. But so far, its price movements have been more in line with risk assets like US stocks, rather than showing clear independence. In fact, gold has done a better job of holding up during shaky times. So, the question is: will things play out differently this time?
Disclaimer – Research
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