On May 29, 2025, the U.S. Court of International Trade delivered a significant blow to President Donald Trump’s economic agenda by blocking his controversial “Liberation Day” tariffs. This decision, coupled with Elon Musk’s departure from the Department of Government Efficiency (DOGE), has sparked widespread discussion about its effects on financial markets, particularly Bitcoin and cryptocurrencies. Despite a rally in equities, Bitcoin remained flat at $108,700, just below its January all-time high. Below, we explore the ruling, its implications for Bitcoin, and what lies ahead for the crypto market.
The Court’s Ruling: A Setback for Trump’s Trade Policy
The U.S. Court of International Trade ruled that Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose a 10% global tariff and additional levies on China (30%), Mexico, and Canada (25%) was unconstitutional, as Congress holds exclusive authority over international commerce. The ruling, prompted by lawsuits from small businesses and 12 U.S. states, mandates the reversal of these tariffs within 10 days, though the administration has appealed, potentially escalating the case to the Supreme Court. The decision disrupts Trump’s strategy to reduce the $1.2 trillion U.S. trade deficit, creating uncertainty for global trade and financial markets.
Market Reactions: Equities Up, Bitcoin Stagnant
Global markets reacted positively, with S&P 500 futures rising 1.5%, Hong Kong’s Hang Seng up 1.3%, and the U.S. dollar gaining against safe-haven currencies like the yen and Swiss franc. However, Bitcoin did not follow suit, remaining stable at $108,700 with a market cap of $3.76 trillion, up 0.63% in 24 hours, and a trading volume of $256.17 billion, up 81.74%. This divergence from equities, which typically correlate with BTC, can be attributed to several factors.
Why Bitcoin Isn’t Surging
- Strong U.S. Dollar: The dollar’s rally post-ruling pressures risk assets like Bitcoin, as a stronger dollar reduces demand for alternative stores of value.
- Legal and Policy Uncertainty: The Trump administration’s appeal and aggressive rhetoric, including claims of a “judicial coup,” signal ongoing trade policy volatility, keeping crypto investors cautious.
- Federal Reserve’s Stance: The Fed’s May 28, 2025, minutes expressed concerns about persistent inflation and the dollar’s safe-haven status, reducing expectations for rate cuts that typically boost Bitcoin.
- Technical Consolidation: Bitcoin’s recent rally to $108,700 has led to consolidation, with technical indicators suggesting a pause before further movement.
Long-Term Implications for Bitcoin
The tariff ruling could benefit Bitcoin in the long term. Economists, including those at the Federal Reserve, warned that Trump’s tariffs could fuel inflation and raise recession risks, with some banks estimating a 60% chance of economic downturn. Blocking these tariffs may reduce inflationary pressures, potentially allowing the Fed to cut interest rates, which historically boosts demand for Bitcoin and other cryptocurrencies. Lower inflation could also stabilize markets, enhancing investor confidence in risk assets.
Elon Musk’s Departure and Its Crypto Connection
Elon Musk’s exit from his role as a “special employee” in the DOGE, announced on May 29, 2025, adds another layer of complexity. Musk’s focus on reducing federal spending will now fall to others, potentially affecting fiscal policies that influence markets. His return to Tesla, where he plans to work “24/7,” could bolster the company’s stock price, which often correlates with Bitcoin’s movements due to Tesla’s significant BTC holdings. A stronger Tesla could indirectly support Bitcoin’s price in the future.
Broader Crypto Market Context
The cryptocurrency market showed mixed performance on May 29, 2025. Top gainers included MicroBitcoin (+187.09%), Kine Protocol (+143.67%), and MXC (+135.52%), driven by speculative trading and project developments. Top losers, such as SONM (-55.53%) and Suiswap (-52.26%), faced sharp corrections. Trending cryptocurrencies included Bitcoin (+0.28%), Ethereum (+1.12%), and Solana (+1.01%), reflecting steady interest in major coins despite the tariff news.
What’s Next for Bitcoin and Crypto Investors?
The tariff ruling introduces both opportunities and challenges for Bitcoin investors. While short-term price stagnation reflects caution, the potential for lower inflation and interest rate cuts could drive future gains. However, the appeal process and Trump’s alternative tariff mechanisms, such as Section 122 of the Trade Act of 1974, could prolong uncertainty. Investors should monitor:
- Appeal Outcomes: A Supreme Court decision could reinstate tariffs, impacting markets.
- Federal Reserve Actions: Interest rate decisions will heavily influence Bitcoin’s appeal.
- Global Trade Developments: Trade negotiations with China, the EU, and others may affect market sentiment.
- Technical Indicators: Bitcoin’s support at $104,636 and resistance at $111,610 are key levels to watch.
Conclusion
The U.S. Court of International Trade’s ruling on May 29, 2025, to block Trump’s tariffs marks a pivotal moment for global markets and Bitcoin. While equities rallied, Bitcoin’s price remained flat due to a stronger dollar, legal uncertainties, and Fed concerns. However, the potential for reduced inflation and interest rate cuts could drive Bitcoin higher in the long term. With Musk’s exit from DOGE and ongoing trade policy battles, crypto investors face a complex but potentially rewarding landscape. Stay informed and cautious, as volatility is likely to persist.
Disclaimer: Cryptocurrency investments are highly volatile and speculative. Conduct thorough research and consult financial advisors before investing.
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