Inflation and Tariffs Could Shape Market Directions in 2025, Highlights JPMorgan Survey

• The ongoing impact of tariffs and inflation is set to shape the future of global markets, including the cryptocurrency sector, as indicated by JPMorgan Chase’s recent survey.

• This research underscores the heightened anxiety among traders, revealing that inflation—once a secondary concern—is now at the forefront of investment strategies.

• According to a COINOTAG source, “The interconnectedness of tariffs with inflation creates a ripple effect that is hard to predict, especially for volatile assets like cryptocurrencies.”

JPMorgan’s latest survey unveils how tariffs and inflation are primed to influence markets profoundly, causing heightened volatility concerns among traders.

Tariffs To Stir Market Uncertainty, JP Morgan Survey Says

In a recent series of trade policy announcements, US President Donald Trump’s administration has implemented significant tariffs, including a 25% tariff on imports from Mexico and Canada. Although an initial delay was agreed upon, the immediate impacts of these tariffs triggered pronounced volatility in both traditional and cryptocurrency markets.

The JPMorgan Chase survey revealed that 51% of institutional traders anticipate inflation and tariffs will emerge as the most impactful drivers of market dynamics in 2025. This observation comes on the heels of a year where inflation concerns accounted for only 27% of responses.

The return of tariffs is exacerbated by China’s counter-actions, notably a 10% tariff on US crude oil and agricultural machinery, which adds further unpredictability to an already volatile landscape. Critics of Trump’s tariff strategies argue that they risk accelerating inflation across various sectors, contributing to a fear of market instability.

Moreover, the report notes that a surprising 7% of traders now consider a potential recession as a minimal threat, down from 18% in 2024, indicating shifting attitudes in response to current policies.

As electronic trading continues to expand, its role within emerging markets, such as cryptocurrencies, becomes increasingly significant. As outlined in the survey, electronic trading is expected to enhance efficiency and liquidity across all asset classes.

Volatility Remains a Core Concern

The survey’s findings point to rising concerns over market volatility, with 41% of traders highlighting this as their foremost issue for 2025, up from 28% the previous year. This new level of volatility stems from unexpected political and economic shifts rather than predictable market events.

“This year’s volatility is primarily fueled by ongoing geopolitical developments rather than traditional market triggers,” noted Eddie Wen, JPMorgan’s global head of digital markets. This modern volatility can lead to erratic trading behaviors, particularly impacting cryptocurrencies whose prices are sensitive to external news.

For instance, Bitcoin has responded sharply to news surrounding tariff adjustments, with its price rallying to a new peak following the delay in tariffs on Canada and Mexico. Moreover, XRP exhibited a substantial recovery aligned with similar political developments, illustrating the direct relationship between trade policies and digital asset performance.

However, these market dynamics also introduce fresh risks, particularly with retaliatory measures impacting the crypto landscape. As Michael Van De Poppe, a crypto trader, observed, “China’s actions introduce further uncertainty; the near-term trends will be heavily dictated by these external pressures.”

Glassnode recently analyzed how this Bitcoin cycle has diverged from historical trends, asserting that macroeconomic variables, including tariffs and inflation, now exert profound influence over market behaviors.

Conclusion

In conclusion, the interplay between tariffs and inflation is not merely a financial concern; it fundamentally reshapes the landscape for traders across diverse asset classes, including cryptocurrencies. As we move towards 2025, understanding these dynamics will be crucial for navigating potential market volatility. Future insights into economic policy will be imperative for sustaining market stability and growth.