On Friday, former US President Donald Trump expressed his support for a Senate proposal that would allow the US to impose tariffs as high as 500% on imports from countries continuing to purchase Russian energy. “It would be okay with me,” he stated.
The proposal covers oil, natural gas, petroleum products, and uranium, with major buyers like India and China highlighted. Intended to reduce Russia’s export revenues, the measure is still only a proposal and has not yet become law.
Reports indicate the bill would grant the President the power to apply punitive tariffs—up to 500%—on goods from any country found to be significantly trading in Russian energy. Lawmakers behind the bill say it aims to cut off energy purchases that support Moscow’s funding. Details on how the tariff would be implemented, including the specific goods and any exceptions, are still being discussed in committee.
Legal experts caution that a 500% tariff would likely raise immediate concerns about trade regulations and potential retaliation from affected countries.
Financial markets reacted swiftly to the news. Cryptocurrency traders began selling off assets, increasing volatility across major tokens. Within 24 hours, nearly $620 million in crypto positions were liquidated, affecting over 152,000 traders. A single $30 million BTC-USD order on Hyperliquid was the largest hit. Major altcoins such as XRP, Solana, and Cardano experienced sharp price swings, while Ethereum fell toward $3,000. Bitcoin dropped 1% following the announcement and has lost nearly 10% of its value since reaching an all-time high of $126,000 on October 6, 2025.
The crypto market is known for its sensitivity to geopolitical trade shocks. Analysts warn that the proposed 500% tariff—much higher than previous rates that led to a $200 billion market loss—could trigger significant panic selling. They suggest that if enacted, the tariff could cause Bitcoin and major altcoin prices to drop by 10% to 20% in the short term due to heightened economic uncertainty.
If implemented, the tariffs could disrupt global energy flows, potentially driving up crude oil and natural gas prices. Higher energy costs often contribute to inflation, which might lead central banks to maintain higher interest rates for longer, negatively impacting risk assets like cryptocurrencies. However, historical trends show that during periods of economic instability, some investors turn to alternatives to cash and bank deposits, which is one reason crypto markets are closely monitoring this proposal.
Frequently Asked Questions
Of course Here is a list of FAQs about the potential impact of major tariffs on the cryptocurrency market framed around your query
General Beginner Questions
1 What does a 500 tariff actually mean
It means the US government would charge an import tax that is five times the original value of specific goods coming from a particular country making those goods extremely expensive
2 How could a tax on physical goods affect Bitcoin which is digital
Major economic policies like huge tariffs create uncertainty in traditional markets When investors get nervous they often sell risky assets and cryptocurrencies like Bitcoin are still considered highrisk by many
3 Is a Bitcoin crash imminent because of this
Not necessarily While such news can cause a sharp price drop due to panic selling its not a guaranteed crash Bitcoins price is influenced by many factors and it has historically recovered from similar negative events
4 What is a market crash in simple terms
A market crash is a sudden sharp decline in the prices of assets across a large portion of the market For Bitcoin a crash is typically a drop of 20 or more in a short period
5 Should I sell all my Bitcoin if this happens
This is a personal financial decision Panicselling during a downturn often leads to losses Many experts advise having a longterm strategy and not making impulsive decisions based on a single news event
Advanced Practical Questions
6 Whats the historical link between US trade policy and crypto markets
There isnt a long direct history but weve seen that when traditional markets react violently to US policy crypto markets often experience high volatility as investors adjust their portfolios for risk
7 Beyond the initial panic what are the deeper economic effects
Massive tariffs can fuel inflation and potentially slow economic growth In such an environment some investors might see Bitcoin as a hedge against inflation while others might see it as too volatile and flee to cash or stablecoins
8 Could this actually be good for Bitcoin in the long run
Its possible If tariffs lead to a loss of faith in traditional financial systems or government currencies it could strengthen the argument for a decentralized borderless asset like Bitcoin However this