This year has proven to be a challenging one for the financial markets. Tumultuous shifts in U.S. trade policy and escalating geopolitical tensions have created widespread uncertainty. Regardless of these volatile conditions, Bitcoin showed remarkable resilience. The world’s leading cryptocurrency is trading near $85,000, a significant rebound from its March lowest point of $74,436. Every expert and investor is watching the daily movements of Bitcoin which continues to rise and fall constantly, asking the question of whether this resilience signals the beginning of a new bullish trend. If Bitcoin proves its stability by bouncing back to the level before the tariffs, many will see it as a hedge against instability and volatility. Will it be able to replace gold and bonds as one of the safest investments? That depends on many factors like the future of tariffs and how the world economy will respond, on the Federal Reserve and their plans about Bitcoin, and the general sentiment about cryptocurrencies.
Market Turmoil in 2025
April 2025 witnessed a series of economic shocks that rattled global markets. President Donald Trump’s administration announced a sweeping 10% tariff on all imported goods, with increased levies on strategic Chinese exports coming up to 125%. This triggered retaliatory actions from many nations, most importantly the EU and China, which set off a trade war that had been in the works since the mid-2010s during Trump’s first term. As a result, equity markets plunged, with the S&P 500 shedding nearly 7% in one week and the Nasdaq following closely behind.
The future of S&P 500 companies doesn’t look so bright with several companies losing over $2 trillion. Analysts are most bearish on chemical firm Albemarle. The company is expected to lose nearly 60 cents a share in the first quarter of this year. That’s a giant reversal from its profit of 26 cents a share in the same year-ago period. Also, Cincinnati Financial is in the hole. The financial firm is seen losing 52 cents a share this first quarter, down from a profit of $1.72 a share a year ago. Analysts also think the Ohio-based insurer’s profit will drop 32% in all of 2025. Shares are down 12% this year.
Every industry is going through change, struggling to navigate the new circumstances with higher costs and less demand. From car manufacturers, retail, and food production, to e-commerce, crypto casinos and social media influencers – everyone is feeling the aftershocks of the disrupted markets.
The tariffs threw everything off balance. Inflation is hovering around 5.5%, measured by the Consumer Price Index (CPI), far above the projected 2% by the Federal Reserve. This was caused by the spike in prices of imported goods that the US heavily relies on. It fed the inflation for months before the tariffs actually went into effect at all since there was a looming threat that became a reality, which prompted companies to stockpile raw materials from Asia and South America. Eventually, these reserves will run out, and the fear of manufacturers about possible higher inflation is driving the prices up, unloading the burden of tariffs on the American consumer. Whatever the product, or service that customers are buying or using, clothes, home renovations, new and used cars, or playing online games of megaways slots, the cost of running businesses will, in the end, be paid by the end user.
Bitcoin’s Resilience During Economic Shocks
Remarkably, even when faced with the devastation in the global economy, Bitcoin managed to outperform traditional assets. Tech stocks and government bonds continue to struggle, oscillating at the lowest point for this year, while Bitcoin already gained back around 13% after bottoming at $74,000. At the moment, Bitcoin’s value keeps spiking past the $85,000 mark.
This behavior of the so-called digital gold gave it an uphand against traditional assets and created a certain hedge from inflation and unpredictability of the global disruptions. The fact that Bitcoin has a cap of 21 million is only enhancing its strength in the fight against inflation. After all the turmoil investors went through with their traditional stocks on Nasdaq and Dow Jones, Bitcoin piqued their interest as an emerging power on the market.
Tariffs and Their Impact on Bitcoin
Tariffs are generally part of trade policies, but this time, US tariffs against the whole world triggered a tsunami of effects that spilled over to cryptocurrencies. Initially, the impact seemed to be devastating, with Bitcoin losing 27% in a short period of time, but it quickly regained its footing, and it already made up for half of it. When the dip happened, many started panic trading afraid that the worst scenario of Bitcoin sliding down to $55,000 is about to come true. Even though the tariffs have been put on hold for 90 days after the initial chaos they caused, they might be actually very good for cryptocurrencies.
- Inflationary Pressure: Tariffs raise the cost of imported goods. In 2025, categories like electronics, automobiles, and agricultural equipment saw price increases between 7% and 15%. When prices go up, inflation also rises, and the trust in fiat currency starts to decline. Paper money starts losing its value, and investors start looking for something that will hold the value of their assets. Until recently, gold and bonds were the safest bet, something that would never lose value, not even in times of war. However, no one expected that Bitcoin would draw so much attention from experts and seasoned investors. Since inflation is not affecting cryptos, it seems like we have found our next hedge against the chaos of the traditional markets.
- Dollar Weakness and Global Trade Rebalancing: Less than 24 hours after the Trump administration implemented tariffs, countries that were hit the hardest, like China, Vietnam and the EU, retaliated with their own set of taxes. This started a global trade war that shook the markets and disrupted manufacturing processes.
- Also, many countries keep their reserves in US dollars. As inflation across the pond began to rise, the trust in the dollar plummeted. Some countries are reconsidering other options for their strategic reserves, while others like members of BRICS which is now made up of ten countries are considering imposing a new currency. Still, both are highly unlikely to take off the ground, so in the meantime, Bitcoin presented itself as a great alternative. Its main appeal lies in being a non-sovereign alternative immune to currency manipulation and political upheaval.
- Flight to Safety from Equities and Fiat: The uncertainty associated with trade policy disruptions leads investors to seek alternative stores of value. This is where Bitcoin is without competition. It is a decentralized, borderless and uncensored currency free from all the fuss on the markets, and global economy politics. Also, it’s a digital asset, so governments don’t have to worry about safekeeping like that’s the case with gold, for example.
- Speculative Demand and Trading Volatility: Tariff headlines often trigger volatility across markets. Now that we’ve seen how Bitcoin reacts to major economic turmoil, the demand for the cryptocurrency is only going to rise. The initial plunge was worrying for many, but it lasted a short time, and Bitcoin regained its value fast. This earned Bitcoin a lot of trust among investors and speculators who praised it for its quick reaction, hitting the new low this year, and bouncing back fast.
Federal Reserve Policy and Interest Rates in 2025
Throughout early 2025, the Fed maintained its policy rate between 4.25% and 4.5%, citing the need to manage inflation while navigating a potential slowdown. However, escalating trade tensions have shifted market expectations.
Traders now anticipate a 75 basis point reduction in rates beginning in June 2025.
This is mainly driven by several factors: soaring inflation triggered by the tariffs, predicted slow GDP for the second and third quarter of this year, and political pressure by the Trump administration to have an amazing first year of presidency.
Again, we go back to tariffs. Import tariffs have thrown all manufacturing off balance in the US. Factories are trying not to let workers go while maintaining production with limited materials. At some point, when supplies run out, something would have to change. Workers are worried about the stability of their jobs, and employers are burdened by more taxes, the tariffs. The inflation is already double than predicted in December 2024, and the production will surely slow down, dragging the GDP with it.
As far as politics, Trump has to keep the promise he made to his voters. Implementing tariffs will bring back billions of dollars and create high-paying jobs. So far, the only promise that came true is the tariffs. We’ll see how that goes, with all the retaliation going on outside the US. Isolation of the country might be a byproduct of all the chaos in the economy right now, but for now, everything seems like business as usual.
Price Predictions for the Coming Months
Analysts vary widely in their projections, but most agree that Bitcoin’s macro outlook is fundamentally bullish:
- Coin Codex projects BTC will rise to $126,000 by the end of April 2025 and stabilize around $95,000 by June.
- Bitwise Investments sees a potential price of $200,000 in 2025 if institutional adoption continues and U.S. policy tilts pro-crypto.
- Galaxy Digital predicts BTC will reach $150,000 by H1 2025 and possibly $185,000 by year-end.
- VanEck offers a conservative estimate of a peak at $180,000 caused by high volatility.
In the near term, a key technical support level exists at $73,745. A break below this could push BTC down to the $55,000–$57,000 range. However, given the recent strength analysts believe the odds favor upward movement.
What can push Bitcoin upward? Several things that are likely to happen this year.
First, Bitcoin, as well as Solana (SOL), Cardano (ADA), Ripple (XRP), and Ethereum (ETH), became part of the strategic reserve of the United States. The increasing adoption of Bitcoin by institutional investors added much needed credibility and reduced volatility. The previous few days were an exception since tariffs hit the whole world, shaking up governments, and dragging in cryptocurrencies along for the ride. However, while everyone is still suffering from the consequences of the initial blow to their economic system, Bitcoin, and other cryptos, took a turn for the better days after the tariffs were announced.
Also, The Federal Reserve’s anticipated interest rate cuts could lead to a more favorable environment for risk assets like Bitcoin. Historically, Bitcoin skyrocketed every time the Feds cut the interest rates. We are still a couple of months away from June when the rates will be announced, but investors are hoping that buying this recent dip will pay off multiple times.
At last, Bitcoin weathered the tariffs’ storm perfectly. While everything crumbled around the globe, governments were scrambling to keep the economy going while the news was coming every second about new import taxes and retaliation from others. All the while Bitcoin took a dive, touched the bottom and swam back into the green again in a matter of days. This fantastic comeback was noticed by investors who were swayed by the flexibility and resilience of the digital coins. If they ever had any doubt, they were all removed in the past few days.
Are We on the Cusp of a Bullish Trend?
The short answer would be – yes, we are. Contrary to anyone’s belief, Bitcoin endured a sharp downturn and came back. This was not the expected result. Only a week ago, speculators were predicting Bitcoin to drop even lower, hitting the bottom at around $22,000. Still, the currency kept going upward and is now at around $85,000. Trade conflicts, looming interest rate cuts, rising inflation, and a weakening dollar, all form an ideal backdrop for a Bitcoin bull run.
Institutional adoption is rising, and technical indicators are recovering pretty well, so everything is telling us that the crisis for Bitcoin is almost over. The Federal Reserve is expected to cut interest rates, which could cause the value to possibly soar. If current trends persist, Bitcoin’s next move could define the shape of digital asset markets for the rest of the decade.
