Can Trump's tariff pause and declining inflation keep Bitcoin afloat? Experts weigh in

Bitcoin (BTC) dived below $80,000 on Thursday despite US Consumer Price Index (CPI) data coming in lower than expected and President Donald Trump's 90-day reciprocal tariffs pause on 75 countries. Several experts argued the potential impact of the tariff pause and declining inflation on the crypto market.

Bitcoin still in murky waters despite tariff delay and low CPI

Bitcoin declined 3% on Thursday, dropping below $80,000 as the general crypto market dived over 5%. The downturn comes amid the release of March's CPI data — which came in lower-than-expected at 2.4% from 2.8% in February — and President Donald Trump's 90-day tariff pause on 75 countries.

Mike Marshall, Head of Research at Amberdata, told FXStreet that the recent CPI report may be misleading when observing its effect on the broader economic outlook. He explains that the latest CPI data understates upcoming inflation "as inventory buffers delay the impact of tariffs."

He argued that the current macroeconomic environment remains bearish for digital assets, as delayed inflation, persistent trade challenges, and signs of recession could weigh on investor sentiment.

"Despite the short-term calm, the macro backdrop remains bearish for crypto over the long term," said Marshall in a note to FXStreet.

Furthermore, Bitfinex analysts shared in a Thursday note that although the tariff pause may have helped calm markets after a turbulent first quarter, it is not a lasting solution. They stated that these conditions could stir short-term support for crypto but may require a stronger catalyst to trigger large capital flows back into Bitcoin.

"Bitcoin may also benefit from a slight reduction in macro pressure, but the market will likely wait for more concrete signals — such as a shift in Fed tone or improving liquidity conditions — before aggressively rotating back into crypto," Bitfinex analysts stated.

Capital inflows into Bitcoin have declined more than 90% since the beginning of the year, falling from a peak rate of $100 billion to around $6 billion, per Glassnode data.

Global market uncertainty could push investors toward Bitcoin

However, Douro Labs CEO Mike Cahill argued that recent macroeconomic developments — including low inflation data and a sharp decline in the bond market — indicate that the traditional financial system is under real stress. He stated that this exhaustion could be the basis for a major capital rotation from debt markets into crypto as investors may lose hope in traditional assets as safe havens.

"In the long term, this environment accelerates the case for crypto infrastructure: 24/7 rails, programmable treasuries, and monetary systems that won't bend to the whims of the political agenda," Cahill told FXStreet. 

Joe Burnett, Director of Marketing Research at Unchained, also echoed a similar sentiment, suggesting that macroeconomic factors could be hitting markets with structural issues. He shared that this could cause a decline in investor confidence in fiat currencies in the long run and propel Bitcoin to benefit at the expense of traditional assets.

"In an era of fiscal dominance and rising geopolitical risk, hard assets like bitcoin stand to benefit as investors seek stability outside the traditional system," Burnet shared with FXStreet.

Bitcoin Depot COO Scott Buchanan expressed the same view, stating that the combination of cooling inflation, tariff pause and falling bond market makes Bitcoin look "more like a long-term hedge than a risky bet."

"Lower inflation takes some pressure off, but the bigger story is growing doubt in traditional systems. People, both investors and regular consumers, are looking for something more stable and Bitcoin is stepping into that role," he concluded.