Bitcoin’s ongoing price volatility has been impacted by the Trump administration's latest wave of tariffs, with BlackRock CEO Larry Fink warning inflation may remain elevated amid rising trade tensions.
Recently, Bitcoin’s price plummeted to a four-month low, dipping below $77,000 before recovering to above $82,000, according to Kraken . This shift underscores the cryptocurrency’s susceptibility to macroeconomic uncertainty, which has been exacerbated by former President Donald Trump’s renewed trade war.
"I think if we all are becoming a little more nationalistic — and I’m not saying that’s a bad thing, you know, it does resonate with me — that it’s going to have elevated inflation," BlackRock CEO Larry Fink said at a Houston conference this week.
The crypto community reacted sharply. "The crypto market didn’t just bleed $1 trillion because of inflation jitters," Mike Cahill, CEO of Douro Labs, told TheStreet Crypto. "What we’re seeing right now is a full-blown reaction to political chaos and global tensions as a result of Trump’s tariffs. While Larry Fink talks about CPI [consumer price index] models and nationalism, crypto investors are selling because the macro environment feels like a rollercoaster ride that isn’t going to stop any time soon."
"The ongoing tariff war is creating uncertainty in global markets, as no country is safe from the potential of economic disruption. What we are seeing now is everyone de-risking to ride out these uncertain times," added Ben Brauser, author of Crypto Moments: How Tech Visionaries Disrupted Global Finance .
Amid these concerns, Wall Street analysts are issuing fresh warnings about potential economic downturns. Morgan Stanley has projected that the S&P 500 index could plunge by an additional 5% if the trade war intensifies. Similarly, Goldman Sachs has raised its recession forecast to 20%, citing tariffs and other economic problems as "key risk" factors. The firm also downgraded its 2025 GDP growth estimate to 1.7%, down from last year’s 2.8% expansion. “The reason for the downgrade is that our trade policy assumptions have become considerably more adverse,” said Goldman Sachs chief economist Jan Hatzius.
Yardeni Research also echoed this concern, declaring that "Trump 2.0’s head-spinning barrage of executives orders, firings, and tariffs have rattled investors, shaken confidence in the economy, and inflamed inflation fears. The pain of these decisive actions is being felt now." These worries about the economy and an ongoing trade war has pushed Yardeni to raise its probability of a recession to 35%.
This week, CoinMarketCap’s Fear and Greed Index also dropped to “extreme greed,” reflecting heightened anxiety in the market which is often correlated with higher sell pressure.
"The potential consequences and risks for a recession have definitely increased as Larry Fink warns us, and the worldwide economic sentiment is one of fear," EstateX co-founder Bart de Bruijn told TheStreet Crypto.