Tariffs Heard 'Round the World

Key Takeaways

• US tariffs have rocked global markets with most digital assets being no exception
• Bitcoin continues to hold relative outperformance despite the spike in equity volatility
• Alt coins continue to sink lower as they thrive on low volatility and high liquidity conditions

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Digital Asset Commentary

President Trump’s “tariff liberation day” arrived last week, with tariffs imposed on most countries—particularly China—far exceeding expectations. Markets responded sharply, reflecting heightened concerns for both declining growth and a potential recession. Volatility has surged, and global risk assets have experienced some of their worst trading sessions in decades. So far, there has been little indication that Trump intends to ease these tariffs, even with its most important trading partners.

While Bitcoin doesn’t have a perfect track record as a safe haven asset, a case can be made for its relative outperformance. As a digital, global, and borderless commodity, it faces less tariff risk than traditional assets. Bitcoin also tends to benefit from geopolitical uncertainty and the rise of multipolarity, both of which could significantly reshape international trade. Unlike traditional markets, BTC trades 24/7 with no circuit breakers or trading halts, allowing it to be sold anytime liquidity is needed. This likely contributed to the sharp 5% drop on Sunday around noon EST—an early bearish signal for other global markets.

While Bitcoin has shown relatively mild outperformance compared to U.S. equities, altcoins—particularly mid-caps—have performed significantly worse. Most altcoins in the $5–10 billion market cap range are now down over 60% from their all-time highs, with further weakness appearing likely. Unlike Bitcoin, these coins often have much higher inflation or emission schedules and are subject to ongoing token unlocks from early investors. Many of these coins belong to the smart contract sector, where they compete for the same pool of user and developer attention. As retail liquidity continues to dry up, most of these mid-cap tokens are losing in this zero-sum game. The best chance for bullish alt coin markets will occur once the liquidity spigots get turned back on, potentially later this year.

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