Expect short-term crypto volatility, but Fed response could spark rebound as inflation hedge – Binance Research

As of 2025, the U.S. Has introduced its highest tariffs since the Smoot-Hawley Act, resulting in a 25.9% decline in total crypto market capitalization since January, which translates to nearly 1 trillion USD in lost value.

Investors are adopting a cautious approach, reallocating assets into traditional safe havens such as bonds and gold, which have been rallying amid fears of inflation, with the average U.S. Tariff rate climbing to around 18.8%.

Inflation pressures stemming from tariff increases could complicate the Federal Reserve’s policy decisions, with markets anticipating a shift towards supporting economic growth rather than merely controlling inflation—setting the stage for potential crypto rebounds.