Market News

BY  Brian McGleenon

Bitcoin's (BTC-USD) price inched up by around 1% to $87,500 (£67,743) in early trading on Thursday, even as global financial markets braced for the fallout from US president Donald Trump’s announcement of a 25% tariff on foreign-made automobiles and auto parts.

The tariff, set to take effect on 2 April, are aimed at bolstering domestic car manufacturing and have already stirred fears of further volatility in global equities. Investor sentiment has turned risk-off as the new measures prompted a notable sell-off in stocks. The S&P 500 (^GSPC) and the NASDAQ (^IXIC) Composite dropped lower on Wednesday, by around 1% and 2% respectively.

Read more: Crypto live prices

However, GameStop (GME) increased nearly 12% on Wednesday following its board's unanimous approval to incorporate bitcoin as a treasury reserve asset.

QCP Capital analysts noted in a market note: "GameStop's surprise $1.3bn (£1.01bn) capital raise for bitcoin allocation has yet to lift broader sentiment in the cryptocurrency market."

They added that while spot bitcoin exchange-traded funds (ETFs) have attracted a steady inflow, spot ethereum (ETH-USD) ETFs have experienced outflows.

Gold's safe haven status comes into play

Amid the current market turbulence, traditional safe havens have become more attractive to global investors.

On Thursday, gold (GC=F) prices surged near a weekly high, reaching $3,035, as investors sought refuge from the uncertainty.

“Bitcoin and gold’s pump suggests investors are seeking safe havens amid widespread disappointment post-inauguration and concerns over a global trade war,” Messari research analyst Sam Ruskin posted on X.com.

Since Donald Trump's US election win on 5 November 2024, bitcoin has appreciated by 22.3%, outperforming both gold’s 9.3% gain and the S&P 500’s (^GSPC) 2.5% decline, according to Ruskin.

He added that even as major stocks faced a bearish trend, bitcoin’s robustness in the market has remained notable.

Trump’s tariff policy, which extends beyond automobiles, includes previous measures imposing a 25% duty on imports from Canada and Mexico and a 20% levy on Chinese goods. The US president’s recent warning on social media that additional tariffs could be imposed on the European Union and Canada if they join forces to “do economic harm” further intensified market jitters.

“If the European Union works with Canada in order to do economic harm to the USA, large scale Tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!” Trump wrote on the Truth Social platform on Thursday.

Investors now remain cautious as fresh reciprocal tariffs loom, potentially leading to higher costs for imported goods, rising inflation, and mounting pressure on central banks to tighten monetary policy.

"Uncertainty surrounding US trade policy and the broader political landscape remains front of mind," QCP Capital analysts said. "The market still lacks clarity on the scope, timing and magnitude of these potential actions, until then, we expect more sideways volatility."