Bitcoin Rises Then Falls as US Supreme Court Strikes Down Trump Tariffs

U.S. Stock markets posted weekly gains on Friday, buoyed by a Supreme Court decision striking down tariffs imposed by the Trump administration. The ruling, delivered in a 6-3 decision, triggered a brief surge in Bitcoin prices before the cryptocurrency retreated, mirroring a pattern of volatility seen in crypto markets recently. The broader market reaction indicated a cautious optimism as investors weighed the implications of the court’s decision against a backdrop of persistent economic uncertainty.

The Supreme Court invalidated President Trump’s tariff regime, finding that the administration lacked clear congressional authorization for the broad imposition of duties. The court’s majority opinion, authored by Chief Justice John Roberts, emphasized that the International Emergency Economic Powers Act (IEEPA) – the legal basis for the tariffs – was not intended to grant the president unilateral authority over trade policy. The ruling potentially opens the door to over $150 billion in tariff refunds, according to some estimates.

Bitcoin initially reacted positively to the news, jumping approximately 2% to briefly surpass $68,000. However, the gains proved fleeting, with the price quickly returning to the $67,000 level. This rapid reversal is consistent with recent trends in the cryptocurrency market, where even modest positive catalysts have been met with swift selling pressure. The Nasdaq Composite Index, in contrast, demonstrated more sustained gains, rising 0.6% to a session high.

The market’s mixed reaction occurred alongside the release of U.S. Economic data that painted a complex picture. The data revealed slower-than-expected economic growth coupled with higher-than-anticipated inflation, raising concerns about stagflation – a combination of slow growth and rising prices. The U.S. Economy grew by a modest 1.4% in the fourth quarter of last year, while the core personal consumption expenditures (PCE) price index rose 3% year-over-year, exceeding expectations. This combination of factors contributed to uncertainty about the Federal Reserve’s future monetary policy path.

The Supreme Court’s decision effectively removes a layer of trade-related risk that had been weighing on markets. The tariffs, implemented in 2025, targeted imports from major economies including China, Canada, Mexico, the European Union, Japan, and South Korea. By invalidating these duties, the court has potentially eased tensions and reduced costs for businesses and consumers. However, the potential for the administration to pursue alternative legal avenues for re-imposing tariffs remains a concern, as highlighted by market participants awaiting President Trump’s scheduled address on February 24th.

Altcoins also experienced a modest rebound alongside Bitcoin, with Ethereum rising 1.64% to $1,962. Other notable gains were seen in XRP (up 1.29% to $1.42), Binance Coin (up 3.88% to $626), and Solana (up 3.68% to $84.54). Dogecoin also saw a rise of over 2%. However, the overall gains were limited, and significant divergence between individual cryptocurrencies persisted, indicating a cautious approach from investors.

Despite the positive market reaction to the tariff ruling, underlying economic concerns continue to weigh on investor sentiment. The stagflationary signals from the latest economic data have prompted caution, and the Federal Reserve’s policy stance remains a key uncertainty. Market strategists suggest that a sustained rally will depend on clearer signals regarding economic growth and inflation. B. Riley Wells’ Art Hogan noted the conflicting signals of higher inflation and slowing growth, suggesting the Fed will likely maintain a cautious approach to monetary policy adjustments.

Market sentiment, as measured by the Alternative Fear & Greed Index, remains firmly in “extreme fear” territory, registering at 12. This suggests that despite the short-term bounce, investors remain wary and are hesitant to commit to more aggressive positions. Analysts suggest a conservative approach, advising investors to manage leverage carefully in the face of ongoing macroeconomic uncertainty. James Alpha’s research head emphasized the importance of Bitcoin maintaining its position above $68,000 as a key indicator of short-term direction, while also noting that the dominance of Bitcoin within the crypto market could limit gains for altcoins.

The situation remains fluid, and investors are closely monitoring developments for further clues about the future direction of the market. The Supreme Court’s decision represents a significant shift in trade policy, but its ultimate impact will depend on how the administration responds and how the broader economic landscape evolves.