The days when President Donald Trump’s trade policy pronouncements could send shockwaves throughout the Bitcoin market seem to be waning.
Bitcoin’s recent price response to similar announcements is indicative of a growing resistance to Trump’s trade rhetoric.
Past reactions: A history of tariff-induced volatility
Bitcoin fell to $93,000 just a week before, after Trump threatened to impose tariffs against Canadian, Mexican and Chinese imports.
His latest policy remarks on aluminum and steel tariffs have had a much more muted effect.
Recent announcement: muted market reaction
US stocks opened higher and shares of US Steel manufacturers surged despite the announcement that 25% levies would be placed on all aluminum and steel imports.
Bitcoin, which briefly fell to $94,700 Sunday night, recovered quickly, rising to $97,700 at Monday’s opening.
Analysts weigh in
Analysts say that Trump’s pregame warning has not affected the markets, and fears about his potential trade moves have diminished.
Tom Dunleavy is a partner at MV Global and spoke to Decrypt about the market’s growing awareness of Trump’s tactics.
When we look back at his previous administration, only a small part of the initial headline tariffs was actually implemented.
The reciprocal tariff shift – a less aggressive strategy?
Market participants have been paying increased attention to Trump’s use tariffs as a negotiation tool with US trading partner.
At its December policy meeting, the US central bank said it was monitoring potential changes in trade policy that could impact its inflation forecast.
If tariffs cause inflation, Fed policymakers may be encouraged to raise interest rates for longer.
The announcement of “reciprocal tariffs” that target only countries currently levying levies on American products, marks a significant change.
Geoff Kendrick – global head of digital asset research at Standard Chartered – stressed the importance of this distinction. He explained to Decrypt that “universal” tariffs are more inflationary, and take longer to impose.
He said that Trump’s recent remarks were a significant step away from an aggressive trade stance.
“It’s a step away form ‘Bad Trump’ and markets are tentatively recognizing that,” he said.
The China factor will remain a concern
Mexico and Canada were able strike deals to avoid sweeping trade disruptions across North America. However, Trump’s relationship to China remains a key factor.
Jake Ostrovskis is an OTC trader with Wintermute. He believes that Trump’s relationship to China is worth watching, but that his remarks about steel and aluminum are a flop.
In a note he wrote on Monday, “This kind ‘news failure” suggests that the narrative as a key driver of the market is losing traction.”
At this point, I think the only thing that could have a real impact on the market would be a escalation of tensions between China and the US.
This article Bitcoin less reactive to tariffs announcements, analysts claim appeared first on The ICD
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