- Bitcoin dropped to $99,540, marking its first decline below $100K in six days, triggered by Trump’s tariff announcement on imports.
- Trump’s executive order on tariffs escalates global trade tensions, with Canada, China, and Mexico retaliating swiftly.
- The volatility sparked $22.7 million in Bitcoin liquidations, reflecting market uncertainty post-announcement.
Bitcoin fell below $100,000 for the first time in six days in response to U.S. President Donald Trump’s announcement of new tariffs for Chinese, Canadian, and Mexican imports. On Feb. 1, they signed an executive order that increased worldwide trading tension and surprised the cryptocurrency community.
According to the White House, Trump’s tariffs include a 25% tariff on Canadian and Mexican imports and a 10% tariff on Chinese imports. Canadian energy imports will also face a lowered 10% tariff. The administration framed its move as a desire to make these countries pay for “ending illegal immigration” and curbing the flow of illicit drugs, including fentanyl.
The reaction of countries under impact was quick. Canadian Prime Minister Justin Trudeau retaliated with a 25% tariff for $106.5 worth of U.S. goods. In its turn, China’s Ministry of Commerce stated it will file a case with the World Trade Organization (WTO) and threatened “corresponding countermeasures.” Mexican President Claudia Sheinbaum stated that her government will apply a “plan B” with tariff and non-tariff tools in order to defend Mexico’s interests.
The immediate financial impact is seen: tariffs have an opportunity to fuel inflation, and then compel central banks to raise interest rates. That tends to drive investors out of risk assets like cryptocurrencies and into safer ones like bonds and term deposits.
$22.7M Liquidated as Bitcoin Faces Volatility
Bitcoin’s drop to $99,111 at CoinMarketCap is a mental blow to the marketplace, having savored its position over six-figure level since closing days in January. CoinGlass data record $22.7 million in long positions getting liquidated four hours following the report, attributing the volatility at work
The crypto community is not in agreement regarding long-term tariff consequences. Others believe the uproar in the marketplace is an overstatement. Dan Gambardello, a founder at Crypto Capital Venture, played down concerns tariffs represent an end to bull run.
“I cannot believe that a general perception out there is that Trump tariffs and Trump memecoins killed bull run,” Gambardello said. Institutional Bitcoin and Ethereum buying, in his view, is an expression of faith in the base of the marketplace. “BlackRock continues buying ETH and BTC and retail frantically panicking because crypto is in a stage of consolidating.”
Others, however, have less hope. Adam Cochran, a principal at Cinneamhain Ventures, disagreed and argued that Bitcoin’s performance is too intertwined with macroeconomics to go unharmed. “Bitcoin isn’t decoupled enough with the global markets and acts in a similar manner triple-levered technology today,” Cochran said. “An economic squeeze of such magnitude simply involves agony everywhere, and we have to be okay with decrying that.”
Tariff Wars and Bitcoin’s Future Impact
Bitwise Invest’s head of alpha strategies, Jeff Park, sounded even more positive about it. “How amazing a tariff war prolonged will be for Bitcoin in the long run,” Park noted, predicting that ongoing uncertainty in economies will make Bitcoin even more desirable as a hedge for traditional markets.
The current market reaction mirrors Bitcoin’s dual function both as a speculative investment and a traditional market volatility hedge. Institutional demand is strong, but retail investors have symptoms of fright in response to macroeconomics uncertainty.
As tariff standoff continues, the crypocurrency market will most likely become a battleground between two camps: one that bets on its long-term viability and one that sees it to be at the mercy of global economic trends. For now, everyone holds its breath for Bitcoin to make its way through such a high-risk financial scenario.
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