In recent weeks, talks of a Bitcoin crash have echoed through financial markets, with prices dipping sharply from their January 2025 peak of almost $110,000 to below $75,000 by early April. This volatility, however, hasn’t dimmed the fervor for cryptocurrency among Washington’s elite, notably President Donald Trump and his ally Elon Musk. Their vocal support underscores crypto’s growing political clout, but it’s the interplay with Trump’s aggressive tariff policies that raises profound questions about international stability, both geopolitically and geoeconomically.

Bitcoin’s allure in Washington stems from its promise of financial sovereignty and its defiance of traditional monetary systems. Trump, styling himself the “crypto president,” has championed policies like a national Bitcoin stockpile and deregulation to cement America’s dominance in the digital asset space. His inauguration coincided with Bitcoin’s record high, fueled by optimism over his pro-crypto stance. Musk, a key advisor and head of the Department of Government Efficiency (DOGE), has long been a kind of crypto currency evangelist, once boosting Dogecoin’s value with a tweet and now advocating for blockchain’s role in economic innovation. Their enthusiasm signals a shift: cryptocurrency is no longer a fringe asset but a strategic tool in America’s economic arsenal.

Yet, this crypto euphoria is colliding head-on with Trump’s tariff blitz. Since April 2025, his administration has slapped sweeping duties—10% to 125% (long story short)—on imports from China, Canada, Mexico, and beyond (albeit with pauses), thus triggering global market turmoil. Bitcoin, often pitched as “digital gold” immune to economic shocks, hasn’t been spared. Prices slid 10% post-tariff announcements, mirroring tech stock sell-offs as investors fled risky assets. Dogecoin, the original meme coin, has plummeted over two-thirds in value in the 11 weeks since Trump’s presidency began. Other major cryptocurrencies like Cardano, Ethereum, and Solana have also crashed, losing over 50% of their value.

This challenges the narrative that Bitcoin is a safe haven; as analyst Garrick Hileman notes, it trades more like a volatile tech stock than a stable hedge. One may recall that Michael Saylor (of MicroStrategy, which owns about $33 billion worth of Bitcoin) boasted that “There are no tariffs on Bitcoin”—only to see Bitcoin reaching its lowest level since November the very next day. Danny Scott, CEO of Britain-based bitcoin exchange CoinCorner, seems to have nailed it: “Recently, Bitcoin has shown a strong correlation with the broader financial markets. As the market declines, Bitcoin has followed, irrespective of its own fundamentals.”

The tariffs are indeed a double-edged sword for crypto. On one hand, they amplify economic uncertainty, potentially driving speculative interest toward decentralized assets. If trade wars erode trust in fiat currencies, Bitcoin could gain as a borderless alternative—a view shared by enthusiasts like Michael Saylor, who argues crypto thrives amid “hidden risks” like inflation and regulation. On the other hand, tariffs raise costs for crypto infrastructure.

I’ve written before on how cryptocurrency mining  played a role in Kazakhstan’s 2022 gas prices crisis. More recently, I commented on Musk’s Starlink competition with China’s SpaceSail while Trump’s administration has been pushing fossil fuels for AI, and targeting minerals in Ukraine and Greenland. The hard fact is that AI and crypto mining drive energy and resource demands, thereby aligning with Big Tech and Musk’s influence (also raising power concentration concerns in the US). Trump’s tariffs risk increasing tensions and intensifying global mineral competition, which in turn can lead to plenty of other conflicts worldwide. But here I digress.

Mining rigs, reliant on imported chips, face higher prices, squeezing margins for U.S. miners already grappling with energy costs. For instance, Canada, still a Bitcoin mining hub which once had 7% of global hash rate (before declaring “war” on it in 2023 over environmental concerns, among other things), now faces 25% U.S. tariffs anyway, which could disrupt cross-border supply chains critical to North American crypto dominance. The same applies to other locations, China itself and countries such as Kazakhstan being the other key hubs.

Geopolitically, Trump’s tariffs and crypto push are also redrawing alliances. His exclusion of China from a 90-day tariff pause—while hiking duties to 145%—escalates tensions with Beijing, which retaliated with 125% tariffs on U.S. goods. This trade war risks fragmenting global markets, with crypto caught in the crossfire. China, once a crypto mining powerhouse, could double down on its digital yuan to counter U.S. influence, challenging Bitcoin’s global relevance. Meanwhile, nations like Canada and Mexico, stung by tariffs, may pivot toward crypto-friendly policies to hedge against U.S. economic pressure, potentially fostering rival blockchain hubs.

Geoeconomically, the fallout is equally stark. Trump’s tariffs could disrupt supply chains, raising costs for electronics and dampening crypto adoption by discouraging investments in digital assets. A trade war might weaken the U.S. dollar’s dominance, prompting speculation that Trump views Bitcoin as a reserve asset to counter volatility, though this risks spurring rival nations to create competing digital currencies, thereby diluting U.S. financial influence. This is yet another way Trump’s policies could backfire.

Musk’s role adds another layer of complexity. His public spats with Trump’s trade advisors, like Peter Navarro, reveal tensions over tariffs’ economic toll. Trump’s coalition has always been polarized, with Elon Musk embodying the libertarian, Milei-admiring free-market extreme, while J.D. Vance represents the protectionist, “pro-labor” wing, if you will. This of course creates tension within the Trumpist somewhat contradictory agenda.

Musk, whose Tesla relies on global supply chains, has been warning that protectionism could spike prices without delivering jobs. His crypto advocacy, however, aligns well enough with Trump’s vision of “American primacy”, suggesting a delicate balancing act: promote blockchain innovation while navigating tariff-induced chaos.

This is not an easy job. Bitcoin’s crash highlights economic uncertainties worsened by Trump’s tariffs, which aim to boost U.S. industry but may raise crypto costs and strain trade ties. This in turn risks a fragmented global financial order, with crypto’s role uncertain, as Trump and Musk’s focus on digital assets faces challenges from their own geopolitical and economic policies.

Finally, Bitcoin and other cryptocurrencies have shown extreme volatility, with the recent crashes highlighting their instability as purely fiduciary assets (in a broader sense, being  market-driven, not tied to reserves or bonds). In response, sovereign nations may shift toward digital currencies backed by tangible assets like government bonds or reserves, offering greater stability and trust for economic systems in the near future. As I wrote in 2022, digital currencies too eventually could be further regulated and now would be a good time to start talking about that.

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This article was originally published on InfoBrics.

Uriel Araujo, PhD, is an anthropology researcher with a focus on international and ethnic conflicts. He is a regular contributor to Global Research.

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