Crypto Chaos: Trade Wars, Tariffs, and Trump’s Tantrums

by

The crypto market, that wild, untamed beast of digital finance, decided to take a nosedive over the weekend. The Fear and Greed Index, which sounds like a psychological test for toddlers, remained firmly in the fear zone. This was thanks to renewed trade war jitters and traders nervously biting their nails ahead of corporate earnings and the Federal Reserve’s decision.

  • The crypto market retreated as trade risks emerged – because why wouldn’t it?
  • Trump, never one to shy away from a headline, threatened a 100% tariff on Canadian goods. Because nothing says “diplomacy” like slapping your neighbor with a triple-digit tax.
  • Cryptocurrencies will also react to the upcoming Federal Reserve interest rate decision – because who doesn’t love a little Fed-induced drama?

Crypto market dips amid trade war fears

Bitcoin (BTC) and its merry band of altcoins decided to take a breather over the weekend. BTC skidded to $88,700, while Ethereum (ETH) tumbled to $2,930. Even Dogecoin and Solana, those perennial class clowns of the crypto world, dropped by over 1%. Because when the going gets tough, even the memes get the memo.

This collective retreat was spurred by fears of a trade war, which, let’s be honest, sounds like something out of a dystopian board game. President Trump, ever the provocateur, threatened to impose a 100% tariff on Canadian goods headed to the U.S. Because, apparently, Canada’s audacity to improve ties with China and lower EV tariffs was too much to bear.

Trump, who seems to have a love-hate relationship with tariffs, accused Canada of, gasp, making trade deals that benefit its own economy. The horror. Canada plans to lower EV tariffs on 49,000 vehicles from 100% to 6%, while reducing its levy on Canadian canola. Because nothing screams international conflict quite like a spat over canola oil.

A renewed trade war between the U.S. and Canada would have major implications, given the sheer volume of trade between the two countries. But hey, at least there’s a silver lining: TACO – Trump Always Chickens Out – might come into play. Or, the Supreme Court could step in and declare Trump’s tariffs illegal. Because who doesn’t love a bit of judicial intervention?

FOMC interest rate decision

The next big catalyst for the crypto market this week? The Federal Reserve’s interest rate decision, scheduled for Wednesday. Because nothing gets investors’ hearts racing quite like a bunch of economists in suits deciding the fate of the economy.

This decision is a big deal because it’ll set the tone for the rest of the year. Economists predict that the Fed will leave rates unchanged between 3.50% and 3.75%, with a Polymarket poll placing the odds at over 98%. Because when it comes to predictions, Polymarket is basically the psychic hotline of finance.

If the Fed hints at more rate cuts later this year, the crypto market could rebound faster than Elon Musk’s tweets. But, of course, that forecast could be impacted by upcoming changes at the Fed, including the appointment of a new Chair. Because nothing says “stability” like a leadership shakeup.

Corporate earnings to impact the market

Meanwhile, the crypto market will also react to corporate earnings from some of America’s biggest companies. We’re talking the Magnificent 7 – Apple, Microsoft, Meta Platforms, and their ilk. Because when these tech titans sneeze, the entire market catches a cold.

These companies are the heavyweight champions of the global economy, and their earnings always have a ripple effect. They’re also the biggest spenders in the AI industry, which is basically the shiny new toy of Wall Street.

Strong earnings could push both the stock and crypto markets higher by encouraging a risk-on sentiment among investors. Because nothing says “optimism” like watching your portfolio grow faster than your avocado plant.

Traders will also keep an eye on the potential for a U.S. government shutdown and any progress on the CLARITY Act. Because, let’s face it, when it comes to U.S. politics, there’s always another crisis just around the corner.

Read More

2026-01-25 10:29