President Donald Trump’s decision on Tuesday to increase planned tariffs on Canadian imports to a staggering 50% has sent shockwaves through financial markets, including Bitcoin and the broader cryptocurrency industry.

In the aftermath of the news, CoinMarketCap’s Fear and Greed Index sank to “extreme greed” on Tuesday, hitting 15 — a signal that market sentiment has sharply shifted.

In recent weeks, Bitcoin has also seen its value drop by over 24% since hitting its all-time high of more than $109,000 prior to Trump's inauguration.

“Trump’s tariffs are acting as a shockwave across markets, and crypto is feeling the brunt of it. With the Fear & Greed Index hitting [15] — lower than during last week’s Bybit hack — investors are in full panic mode," Alice Liu, Head of Research at CoinMarketCap, told TheStreet Crypto. "But Bitcoin’s historical reaction to macro uncertainty suggests this correction could be short-lived."

“The imposition of substantial tariffs on Canadian steel and aluminum by the U.S. administration has introduced volatility across financial markets, with cryptocurrencies like Bitcoin experiencing notable price adjustments,” added Autonomys CEO Todd Ruoff. “This development highlights the interconnectedness of global economic policies and the crypto ecosystem.”

On Tuesday, Bitcoin's price fluctuated around $82,000 , while Ether saw its price move to $1,908, according to Kraken . Other popular cryptocurrencies like Dogecoin are currently trading at $0.16 while XRP is currently priced at $2.13 .

Trump's official memecoin was also down on Tuesday, dropping to $10.38 .

“Trump’s tariff tantrum is rattling global markets—and crypto is catching the fallout," Mike Cahill, CEO of Douro Labs, told TheStreet Crypto. "These kinds of headline-driven shocks inject massive uncertainty, and investors are scrambling to de-risk. Bitcoin, Ethereum, and even DOGE are all getting dragged as part of a broader flight from volatility."

"While Bitcoin often tracks gold with a 70% correlation, it still behaves like a risk asset under stress, which means it tends to move harder and faster in both directions," Cahill explained. "Tariffs may seem like a traditional trade issue, but their ripple effects hit everything from equities to crypto to commodities. The real irony is that, while crypto was designed to be a hedge against this kind of market chaos, in moments like this, it trades more like a tech stock than digital hold. Until the dust settles, we’re going to keep seeing these sharp whipsaws across risk-on assets.”

Trade tensions are also exacerbating worries about interest rates: "If tariffs drive prices higher, then there's concern that the Fed will keep rates higher for longer, which is negative for risk-assets like Bitcoin and crypto," Maple Finance CEO Sid Powell told TheStreet Crypto.

However, the trade war's impact on crypto markets is not surprising, some experts say: "Uncertainty and instability in global trade policies always ripple into crypto markets," Jeff Feng, Sei Labs' co-founder and former Goldman Sachs investment banker, told TheStreet Crypto. "If tariffs disrupt traditional finance and supply chains, investors may temporarily punish digital assets as well."

"Bitcoin has not quite lived up to the volatility hedge it was meant to be," Feng added. "Institutional adoption and regulatory clarity alone have not broken the correlation between traditional markets and digital assets. However, frustration with traditional financial rails and markets may accelerate blockchain-native deployment for cross-border trade."