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Tariffs, Macroeconomics, and Sentiment Outlook for Major Cryptocurrencies Through 2025

After a steep but short dip, cryptocurrencies regain their place at the center stage. Among the many digital assets that dominate headlines, Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Ripple’s XRP, and Solana (SOL) are considered cornerstones of the crypto economy. The world is still feeling the aftershocks of the newly imposed tariffs, while major cryptocurrencies are already getting their footing in the unfamiliar setting. 

Even though the fear of tariffs was looming for some time, many world governments were unprepared for what was coming their way, scrambling at the last minute so that their economies wouldn’t crash. The US import taxes had unforeseen consequences on the global economy, causing markets to plunge by more than 25% in just one week. To mitigate the damage, Trump paused tariffs for 90 days after several countries, including China and the EU, imposed retaliation taxes. 

Tariffs and the Federal Reserve 

History has shown that tariff wars tend to be damaging to global growth, as seen in past episodes like the 1980s U.S.-Japan trade tensions. If the U.S. were to impose new or higher tariffs in 2024–2025, the short-term impact could include “bad” inflation which is a term used to describe inflation caused by higher prices rather than economic growth. 

For cryptocurrencies, the initial impact of tariffs would have negative repercussions. The logic behind it is that, at first, tariffs will cause stagnation of the economy and uncertainty about the future movements on the markets. In such circumstances consumers face higher prices, global trade declines, and business investment slows down.  Crypto is still seen as a risky investment, even when the markets are stable, and investors are generally wary of buying digital goods. When the global economy is exposed to a major transformation, such as implementing import taxes and possibly causing a trade war,  investments in cryptocurrencies diminish greatly. 

The Federal Reserve is scheduled to make an announcement in June about new interest rates. Some speculate that, due to the raging inflation, the Feds would have to raise the rates which would make risky assets like Bitcoin even less attractive to investors. However, if the decision is made to lower the interest rates regardless of the inflation and in an attempt to jumpstart the economy, cryptocurrencies would get a tailwind they need to crawl their way back to the level before the tariffs. 

Oddly enough, the long-term effects of prolonged tariff conflicts could strengthen certain cryptocurrencies. If the crisis continues, it will bring economies around the world to a standstill, and we will have so-called stagflation. This happens when the prices of raw materials, with added import taxes, are so high that the production halts completely. Simply, there is no profit to be made from manufacturing, sales, e-commerce businesses, or crypto casinos, with the workforce becoming dispensable resulting in layoffs and the decline of the whole economic system. 

If this grim scenario somehow happens, central banks will have to adjust their monetary policies to prevent hyperinflation and stimulate growth. The truth is that the United States, or in this case President Donald Trump who single handedly imposed tariffs since he doesn’t need the approval of the Congress or the Senate for this, can’t keep raising tariffs endlessly since this would cause the interest rates to skyrocket. But for the sake of discussion, let’s say that the trade war gets out of control with spiking tariffs. This would actually be great for Bitcoin, and other cryptos by extension. Stocks would tank, but Bitcoin would flourish as a safe haven for the investors, eventually taking the lead from the gold and government bonds. This happened not so long ago, in March of 2023, when stocks took a dive on the market, but Bitcoin kept growing in value. It piqued the interest of investors who saw cryptocurrencies as the safest asset over oil, gold and other tangibles. 

Another thing that could drive  Bitcoin’s price upward - is independence from any government or decentralization. When an asset is not susceptible to any missteps of a single government, it makes it a desirable investment free of potentially negative effects. In short, tariffs are going to be bad, and then good for cryptocurrencies. Initially, they would cause a drop, as we already saw in the previous weeks, but eventually cryptos will rebound with more power and less volatility. Altcoins, on the other hand, are closely attached to tech industries and are likely to follow the price of stocks, which means that they would likely stay unpredictable until the dust settles and stocks and bonds gain balance and solidify their place on the market again. 

Global repercussions of U.S. trade policy also extend to how other nations respond. Some countries facing U.S. sanctions or trade barriers have turned to cryptocurrencies to keep the trade going. Russia, even though is not facing any tariffs from the US since there are already sanctions against it in place, took a stand to start using BTC, ETH and USDT in portions of its oil trade with China and India to soften the blow of the embargo. These crypto transactions help Russia settle trades without relying on U.S. dollars while going around the sanction limitations. Why is this important for the rest of the world? Well, it gives an example to other nations on how to circumvent sanctions and keep their economies thriving with the use of cryptocurrencies. And it already happened - Iran and Venezuela have used crypto to keep parts of their economies running under U.S. sanctions. 

Tariffs are not sanctions, but they have similar effects. Implementation of the US import taxes could encourage nations and businesses to explore cryptocurrencies for international payments and as a protection against any future trade disruptions connected to the US dollar. This is probably something that Trump’s administration didn’t take into account since they didn't release any statements addressing the issue. The world shifted to alternative coins driving their growth and stabilizing inflation, instead of crumbling down under the pressure of the unbearably high tariffs. 

If there’s one thing to learn from the recent events, it’s that global economic tensions can drive the adoption of decentralized digital currencies, both for transaction purposes and as reserve assets causing their values to soar. 

Bitcoin (BTC) – King of Crypto and Monetary Hedge

After a fickle 2024, and an extended 8-month consolidation, the end of the year brought Bitcoin to an unprecedented level, breaching the $100,000 mark. This rally was mostly due to the increased optimism among investors about ETFs and the growth of the global economy. The introduction of Bitcoin spot ETFs brought significant new capital into Bitcoin and established the most valuable crypto as one of the most desirable assets on the market. 

In early 2025, Bitcoin led the way for all other cryptocurrencies, outperforming them in every aspect, into the early stages of a bull market. Through 2025 Bitcoin price was mainly driven by macroeconomics, tariffs imposed by the US and political decisions. With the trade war threatening to throw off the balance of many Western economies, and the economic giant in the east, Bitcoin suffered a sharp decline in March dropping over 27%. Still, a quick bounce back followed, with Bitcoin gaining back around 15%. This affected many businesses, car dealerships, investors, online games like megaways slots, and various online retail sales that accept cryptocurrencies. 

Federal Reserve policies will massively impact the value of Bitcoin in 2025. They were expected to cut rates in January and March, but they decided to refrain from it. The next expected interest rate cuts are supposed to happen in June, and the announcement is highly anticipated. Inflation is double than anticipated 2%, with the numbers going as high as 4.6% in April. If the Feds cut interest rates,  inflation will go down at the expense of unemployment. In an unlikely scenario of interest rates going up, it could trigger selloffs, including Bitcoin which will drive the value down.

Investor sentiment toward Bitcoin in 2025 is broadly optimistic, but cautious. SEC has a softer stance with Bitcoin which is a good signal to investors who are already interested in the major cryptocurrency. This fact, coupled with the new administration that is extremely tilted towards adopting Bitcoin and is already implementing crypto-friendly regulations, can drive BTC’s price to $200,000 by the end of the year. Overall, the outlook for Bitcoin is looking to bring a bullish trend for the rest of 2025. Some optimistic prognoses predict over $200K, while others have grimmer forecasts saying that after this burst of power, a bearish trend is about to take over bringing Bitcoin down to $55,000. There is actually some substance to these pessimistic views. Risks such as a sharp global recession, or a resurgence of inflation prompting Fed tightening, could see Bitcoin trading lower, potentially revisiting the $50K–$70K range in a worst-case scenario.

 Ethereum (ETH) – The Smart Contract Giant

Ether is the absolute king when it comes to NFTs, smart contracts and tokenization of physical assets. It’s often seen as the backbone of cryptocurrencies. Ethereum is closely connected to the value of Bitcoin and is in even tighter relations with tech stocks that are more sensitive to global liquidity. Its value largely depends on the interest rates. When interest rates were rising and liquidity was being drained in 2022, Ethereum suffered a significant drawdown, much like tech stocks. It bounced back in 2024 when, again, the Federal Reserve cut the interest rates causing stocks to go up and pulling Ethereum with them. Also, Ethereum now offers staking yields since its transition to Proof-of-Stake, meaning investors can earn a return by locking up ETH to secure the network. If the rates go up, the return might be around 5% which can be a good or bad investment, depending on the portfolio's volume. However, as we are expecting to happen in June, if the interest rates go down, and they probably will consider the huge inflation, the yield can be massive since the ETH is surely going to enter a sharp bull trend. 

In general, investor sentiment toward Ethereum is positive, but somewhat more modest relative to Bitcoin’s current euphoria. Think of the ETH as a middle child. It’s almost invisible, never in the spotlight, but it does a lot of work in the background. This is how Ethereum operates in the shadow of Bitcoin, eternally complementing it but without the potential to replace it. Part of this is due to Ethereum facing strong competition in the smart contract platform arena from Solana, Cardano and others, whereas Bitcoin stands relatively unchallenged in its specific niche, ruling peacefully. 

On the other hand, Ethereum is not particularly hit with the tariffs, nor will the trade war affect its value. The price will go down due to tech stocks suffering, but in general, the crypto that is backed by tech innovations and new developments in AI technologies cannot lose value in the long run. 

Ethereum’s price through late 2025 will likely follow the rise of  Bitcoin. At the moment, ETH is trading at over $1,600 gaining about 7% in one day. It’s very possible that Bitcoin will lose steam as the year goes on, and this could be a chance for ETH to outperform the main currency. A plausible scenario is Ethereum reclaiming and exceeding its previous all-time high of around $4,800 which happened in late 2021.  Many analysts predict that Ethereum could go over $10,000 by the end of 2025 if the bull case plays out. Interestingly enough, there are no pessimistic forecasts for ETH this year, so it seems that the biggest dip has already happened, and for Ether the only way to go is up. 

Looking at unemployment, national debt, interest rates and many other economic factors, it feels like the whole world is in crisis. The fact that the US went on with the tariffs had the world spinning a bit faster. However, if we’re talking strictly crypto, there is a positive outlook across the market. After the headfirst dive cryptos took about a month ago, everything is at a standstill now with tariffs temporarily being suspended. According to analysts, and market experts, we are in for the bullish summer this year, for a change, but before that, we have a few hurdles to overcome. One thing is crystal clear: cryptocurrencies moved beyond being a niche and became the mainstream talk of the town. 

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