The crypto market staged a cautious recovery on Friday after the US Supreme Court ruled against Donald Trump’s tariffs.

Bitcoin (BTC) price rose to $68,200, while the market capitalization of all coins rose by close to 1% to over $2.3 trillion. Some of the gainers in the crypto market were Kite, Morpho, LayerZero, and Render, which rose by over 6%.

The stock market also erased the earlier losses, with the Dow Jones and Nasdaq 100 indices rising by over 0.50%.

In a ruling, the majority, led by Chief Justice John Robert, said that Trump erred in using the emergency powers when issuing tariffs. They argued that the power to issue tariffs belonged to Congress. Justices Clarence Thomas. Brett Kavanaugh and Samuel Alito dissented.

Crypto market gains could be short-lived

Still, the gains in the stock and crypto markets may be short-lived. For one, while the ruling is a major setback to Donald Trump, he has other tools to implement tariffs that will achieve a similar goal. The only challenge is that some of those options require lengthy investigations, while some of them have a time limit.

Additionally, the tariff ruling will likely be undercut by the potential war in Iran. Media reports suggest that Trump has assembled the biggest military equipment and officials in the Middle East in years. They also suggest that the attack could happen as soon as this weekend. Polymarket odds of an attack have jumped in the past few days.

An attack on Iran is risky because the country largely controls the Strait of Hormuz, where millions of barrels of oil pass through each day. It would lead to higher inflation and make it difficult for the Federal Reserve to cut interest rates.

At the same time, crypto price continued to experience thin demand, with futures open interest and ETF outflows accelerating. Bitcoin and Ethereum ETFs have shed billions of dollars in value in the past few months. The futures open interest has dropped from over $250 billion last year to below $100 billion today.