One Year After Liberation Day and How Trump's Tariff War Reshaped Crypto and the US Dollar

On April 2, 2025, President Trump walked into the Rose Garden and announced the largest tariff wall around the US economy in a century. Bitcoin dropped from $85,000 to below $82,000 within 48 hours, the S&P 500 lost 10% over two trading sessions in its worst back-to-back decline in decades, and the crypto market shed roughly $200 billion in total value. Trump called it "Liberation Day," though markets had a considerably less flattering name for the largest single-day tariff escalation in modern American history.

One year later, the tariffs that started it all have been struck down by the Supreme Court, the dollar has posted its worst annual performance since 2017, and Bitcoin is trading around $67,000 after a round trip that took it from $83,000 on Liberation Day through a high above $126,000 and back down again. The anniversary marks the point where the relationship between trade policy, the dollar, and crypto permanently shifted.

What Happened on the Original Liberation Day

Trump's April 2, 2025, executive order imposed a baseline 10% tariff on all imports into the United States, with additional country-specific rates targeting roughly 60 nations. China faced tariffs exceeding 50%, the EU was hit with 20%, and even close allies like Canada and Mexico saw rates that weren't exempt from the broadest strokes of the policy. The legal authority Trump used was IEEPA, the International Emergency Economic Powers Act of 1977, a Cold War-era statute that no president had ever used to impose tariffs before.

The market reaction was immediate. The Dow Jones dropped over 4,000 points in two sessions, and in crypto, over $500 million in combined long and short positions were liquidated within 24 hours as panic hit both sides of the trade. BTC fell to $82,000, ETH dropped roughly 25% over three days, and altcoins saw double-digit declines across the board.

But the initial crash was only the beginning. Over the following 12 months, tariff policy changed more than 50 times, with rates going up, pauses being announced, and exemptions added and removed. The uncertainty itself became the dominant force in markets, and that unpredictability filtered into every asset class.

How the Supreme Court Changed Everything

On February 20, 2026, the Supreme Court ruled 6-3 in Learning Resources Inc v Trump that the IEEPA tariffs were unconstitutional. Chief Justice Roberts wrote that two words in IEEPA, "regulate" and "importation," could not bear the weight of giving the President unlimited power to impose tariffs on any country, any product, at any rate, for any amount of time.

Roberts invoked the "major questions" doctrine, stating that if Congress wants to delegate the power to make decisions of vast economic significance, it must do so clearly. IEEPA contains no reference to tariffs or duties, and no president before Trump had read the statute as granting that power.

Within hours, the White House pivoted. Trump issued a new proclamation under Section 122 of the Trade Act of 1974, imposing a flat 10% tariff on imports globally. Section 122 is limited to 150 days, meaning the replacement tariff expires on July 24, 2026. Trump floated raising it to 15% on Truth Social but has not issued a formal order.

The immediate legal fallout is staggering. According to CBP's March 2026 affidavit, over 330,000 importers paid approximately $166 billion in IEEPA duties across 53 million entries. Those refunds are now owed, and interest charges are accumulating at roughly $700 million per month.

What the Tariff War Did to the Dollar

The dollar's decline over the past year tells its own story. The DXY index fell about 9.6% in 2025, its worst annual performance since 2017. April 2025 alone saw a roughly 2% single-day plunge on Liberation Day, and the index never recovered its pre-tariff levels. Morgan Stanley estimates another 10% decline by the end of 2026.

Harvard economist Kenneth Rogoff argues that dollar dominance peaked in 2015 and has been declining since, but Liberation Day accelerated the trend dramatically. "The euro, the Chinese yuan, and crypto will be the biggest beneficiaries as the dollar loses market share," Rogoff stated, adding that "future historians may well look back and see Liberation Day as marking the beginning of the end of the dollar's absolute dominance."

The mechanism is straightforward. When your largest trading partners can't predict what you'll charge them next month, they start looking for alternatives. And some of those alternatives are now digital.

How Crypto Actually Performed Through the Tariff War

The Bitcoin price chart from April 2025 to today reads like a stress test of every narrative the crypto market has ever told itself.

The short-term story is that BTC followed risk assets down when tariffs hit and followed them back up when the Fed cut rates three times in 2025. The longer-term story is more interesting. Despite being down roughly 47% from its all-time high above $126,000, the infrastructure around Bitcoin has grown substantially.

Bitcoin ETF inflows totaled $23 billion in 2025 and another $18.7 billion in Q1 2026 alone, pushing cumulative net inflows past the $65 billion mark. BlackRock's IBIT has approached $100 billion in assets under management, and 68% of institutional investors now either hold or plan to invest in Bitcoin ETFs.

The tariff war didn't kill institutional crypto adoption. If anything, the de-dollarization narrative gave institutions a new reason to allocate, as Grayscale's Zach Pandl noted that "tariffs will weaken the dominant role of the dollar and create space for competitors including Bitcoin."

The De-Dollarization Trade and What Comes Next

Seven in ten Americans now believe tariffs have increased their cost of living, including 64% of Republicans. Manufacturing employment is down 89,000 jobs from April 2025 levels. Inflation in February 2026 stood at 2.4%, with Fed Chair Powell acknowledging that tariffs have boosted goods-sector inflation specifically.

The Section 122 replacement tariffs expire on July 24, 2026, creating a binary outcome that markets will start pricing well before the deadline. If Congress passes legislation to extend them, the tariff regime continues. If the deadline passes without action, the US drops from the highest tariff levels in a century to pre-Liberation Day rates overnight.

For crypto, the calculus depends on which narrative wins. Q1 2026 ETF inflows of $18.7 billion happened during a period when BTC was falling in price, meaning institutions were buying into weakness. That is not the behavior of speculative tourists.

But the honest answer is that Bitcoin hasn't fully delivered on the "digital gold" thesis during this tariff war. Gold outperformed BTC over the past year on a risk-adjusted basis, and BTC's correlation with the Nasdaq remained stubbornly high through most of the volatility. The price action shows that crypto still trades as a risk asset first and a dollar alternative second.

Frequently Asked Questions

What was Liberation Day and why does the anniversary matter?

Liberation Day refers to April 2, 2025, when President Trump imposed sweeping tariffs on virtually all US imports using IEEPA authority. The anniversary matters because it marked the start of a 12-month period that saw the Supreme Court strike down presidential tariff authority, the dollar post its worst year since 2017, and Bitcoin ETF infrastructure grow even as prices declined.

Did the Supreme Court ruling end all tariffs?

The Court struck down tariffs imposed under IEEPA, but Trump immediately replaced them with a flat 10% tariff under Section 122 of the Trade Act of 1974. That replacement tariff is limited to 150 days and expires on July 24, 2026, and existing Section 232 tariffs on steel and aluminum remain in place as well.

How much money is owed in tariff refunds?

CBP data from March 2026 shows approximately $166 billion was collected from over 330,000 importers across 53 million entries. Interest on unpaid refunds is accruing at roughly $700 million per month, adding urgency to the refund process still being worked out through the Court of International Trade.

Is Bitcoin actually a hedge against de-dollarization?

The data is mixed over this specific 12-month period. BTC is down from its all-time high and has traded mostly in line with risk assets rather than as an independent store of value. But institutional allocation through ETFs has grown significantly even during the downturn, suggesting large capital allocators are treating BTC as a long-term hedge rather than a short-term trade against the dollar.

Bottom Line

Liberation Day set off a chain of events that reshaped how the US uses tariffs, how the Supreme Court interprets presidential trade authority, and how global capital thinks about the dollar. The $166 billion in refunds, the 9.6% dollar decline, and the Section 122 expiration in July are all still-moving pieces of the same story.

For crypto traders, the forward-looking question is binary. If the de-dollarization trend accelerates and institutions keep building BTC positions through ETFs at the pace seen in Q1 2026, the infrastructure is ready for a repricing. If BTC remains correlated with tech stocks and the dollar stabilizes after July, the "digital gold" narrative stays aspirational rather than proven. The July 24 Section 122 deadline is the next inflection point, and the market will start positioning well before it arrives.

This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency trading involves substantial risk. Always conduct your own research before making trading decisions.