Regulation
Trump's Tariff Announcement Deepens Crypto Selloff
25 Feb 2026, 05:00
6 views
Admin
A 15% global tariff announced by President Trump in late February pushed inflation expectations higher and took further rate cuts off the table, deepening crypto's decline.
President Trump's announcement of a 15% global tariff in late February added a fresh and significant headwind to an already struggling crypto market, pushing inflation expectations higher and effectively removing the prospect of a near-term interest rate cut from the table. According to CME FedWatch data at the time, the probability of a March rate cut fell to just 6%, down sharply from more than 20% a month earlier, as markets repriced the likely path of Federal Reserve policy in response to the tariff news.
The announcement landed at a particularly sensitive moment for crypto markets, which were already reeling from Bitcoin's steep drop below $60,000 earlier in the month. Rather than offering any relief, the tariff news compounded the existing selling pressure, as higher expected inflation combined with a reduced likelihood of monetary easing gave investors fewer reasons to rotate back into risk assets like Bitcoin and its peers.
The tariff-driven selloff illustrated how deeply intertwined crypto markets had become with broader macroeconomic policy by 2026. Where earlier crypto cycles had sometimes traded somewhat independently of traditional macro catalysts, the market's reaction to both the Fed chair nomination in January and the tariff announcement in February showed a level of sensitivity to interest rate expectations and trade policy that more closely resembled how traditional risk assets like growth stocks typically respond to the same news.
By the time the tariff announcement's full effects had worked through the market, Bitcoin and major altcoins including Solana, Dogecoin and XRP had all extended their declines further, part of a broader late-February selloff that would leave the market searching for a floor heading into March. The episode reinforced a lesson many crypto investors had learned repeatedly over the prior several years: macro policy decisions made far outside the crypto industry itself could move digital asset prices just as forcefully as any crypto-specific news.
The announcement landed at a particularly sensitive moment for crypto markets, which were already reeling from Bitcoin's steep drop below $60,000 earlier in the month. Rather than offering any relief, the tariff news compounded the existing selling pressure, as higher expected inflation combined with a reduced likelihood of monetary easing gave investors fewer reasons to rotate back into risk assets like Bitcoin and its peers.
The tariff-driven selloff illustrated how deeply intertwined crypto markets had become with broader macroeconomic policy by 2026. Where earlier crypto cycles had sometimes traded somewhat independently of traditional macro catalysts, the market's reaction to both the Fed chair nomination in January and the tariff announcement in February showed a level of sensitivity to interest rate expectations and trade policy that more closely resembled how traditional risk assets like growth stocks typically respond to the same news.
By the time the tariff announcement's full effects had worked through the market, Bitcoin and major altcoins including Solana, Dogecoin and XRP had all extended their declines further, part of a broader late-February selloff that would leave the market searching for a floor heading into March. The episode reinforced a lesson many crypto investors had learned repeatedly over the prior several years: macro policy decisions made far outside the crypto industry itself could move digital asset prices just as forcefully as any crypto-specific news.