On April 2, 2025, President Trump walked up to a podium and effectively lit a match under global markets. The “Liberation Day” tariffs slapped a blanket 10% levy on most imports entering the US, with reciprocal penalties climbing as high as 145% on certain Chinese goods. By the time Wall Street closed the next day, roughly $2.5 trillion in global equity value had evaporated.

The S&P 500 cratered between 4% and 12% depending on the session, while the Dow Jones shed nearly 1,700 points on April 3, its worst single-day loss since mid-2020. The VIX, Wall Street’s so-called fear gauge, spiked into the mid-40s.

Crypto caught in the blast radius

Bitcoin didn’t escape the carnage. The world’s largest cryptocurrency slid from nearly $88,000 to just over $82,000 during the initial sell-off. Investors weren’t discriminating. They were selling everything that wasn’t nailed down, rotating into what they perceived as safer ground. Treasury yields told that story clearly, with the 10-year briefly surging toward 4.6% as capital rushed into government bonds.

On April 9, Trump announced a 90-day pause on additional tariff escalations. Risk assets responded like a coiled spring. Bitcoin and the broader crypto market snapped back sharply, recovering lost ground faster than most traditional indices.

The safe haven debate, revisited

Bears point to the immediate sell-off. When panic hit, Bitcoin dropped alongside stocks. Bulls counter with the recovery speed and the longer arc. Bitcoin’s bounce following the 90-day pause was swift and decisive. Economic experts warned that the tariffs could fuel inflation while simultaneously dragging on GDP growth. That stagflationary cocktail is precisely the scenario where Bitcoin’s fixed supply narrative gains traction.

What this means for investors navigating trade war volatility

The April tariff shock wasn’t an isolated event. It was part of a broader trade policy framework during Trump’s second term, building on earlier measures targeting steel and aluminum imports. The administration framed these actions as necessary steps to protect US economic and national security interests against persistent trade deficits.

Even the 90-day pause was exactly that: a pause, not a reversal. By October 2025, renewed tariff threats triggered crypto market liquidations exceeding $18 billion, a reminder that the trade war’s impact on digital assets wasn’t a one-time event.

Bitcoin’s drawdown was shallower than equities in percentage terms, and its recovery was faster. For investors with the stomach and the time horizon to weather the initial turbulence, that asymmetry is worth paying attention to.