New Tariff Data Shows Why the Crypto Market Has Been Stuck for Months
New research indicates US tariffs have quietly burdened the economy, potentially explaining the crypto market's stagnation since the October sell-off.Summary
Recent research highlighted by The Wall Street Journal suggests that US tariffs are negatively impacting the domestic economy. A study by the Kiel Institute for the World Economy found that 96% of tariff costs are absorbed by US consumers and importers, while foreign exporters bear only 4%. This effectively functions as a slow-moving consumption tax, subtly eroding purchasing power over time. While US inflation remained moderate, the pressure accumulated within the economy, squeezing importer and retailer margins. This drained discretionary liquidity, a key driver for crypto markets, explaining the market’s inability to gain momentum after the October downturn and the lack of sustained upside despite easing inflation. The tariffs contributed to a liquidity plateau, rather than a typical bear market, keeping crypto prices stagnant.
(Source：BeInCrypto)