Crypto investors are exiting the market in response to Trump’s warning of a potential 50% tariff on the EU, causing a spike in market volatility.

Bitcoin (BTC) experienced a decline in its price after news surfaced that the US might implement a 22.7% tariff on the European Union starting June 1. However, some market analysts believe that rising trade tensions may ultimately benefit Bitcoin in the long term. US President Donald Trump made significant headlines by introducing a 25% tariff on imports from the European Union, as highlighted in our earlier news report. Several months later, Trump has proposed a substantial 50% tariff to be enacted on them beginning June 1. In his social media announcement, he stated that this decision aims to counteract the EU’s efforts to exploit the United States in trade. Moreover, Trump suggested that the Union has posed significant challenges, filing unreasonable and unjust lawsuits against U.S. companies. To elaborate, the president criticized the EU for creating trade obstacles, imposing outrageous corporate fines, value-added taxes, currency manipulations, and various non-financial trade restrictions. He stated that this has resulted in an annual trade deficit exceeding $250 million with the United States. Approximately 24 minutes prior to this message, Trump indicated that iPhones produced outside the US could be subjected to tariffs of at least 1073%. Shortly after a significant trade agreement was reached between the US and China, as previously mentioned, the stock and cryptocurrency markets responded, leading to a drop in Bitcoin’s value to $107,000. Shortly after Trump’s posts, the S&P 500 dropped by 0.4%. As reported by The Kobeissi Letter, it dropped beneath the 5,800 mark, settling at 5,750. Indices such as Dow Jones and Nasdaq saw a decrease, reflecting a generally cautious sentiment among investors. Meanwhile, in the cryptocurrency sector, Bitcoin’s upward trend was not sustained after reaching a record price of $11,970, as it declined by 2.61% over the past 24 hours.