David Edwards
Following U.S. President Donald Trump’s executive order imposing new import duties on goods from China, Canada, and Mexico, Bitcoin has dropped below $100,000 for the first time in almost a week. Global trade tensions have been raised by the action, and while the impacted countries have taken quick retaliatory action, opinions on the possible long-term effects of the decision are still divided in the cryptocurrency market.
Trump’s Tariff Policy Causes Uncertainty in the Market
Trump has imposed a 10% duty on Chinese goods and a 25% tariff on imports from Canada and Mexico, the White House said in a statement released on February 1. However, a 10% tariff will be applied to Canadian energy resources. The administration defended the move as a way to put pressure on these countries to stop fentanyl trafficking and illegal immigration.
Concerns about inflation have been raised by the action, as analysts caution that higher tariffs may result in higher prices and, in turn, higher interest rates. Such circumstances have historically caused investors to gravitate toward conventional safe-haven investments like Treasuries and fixed deposits rather than riskier assets like cryptocurrency.
Global Trade Tensions Are Increased by Retaliatory Tariffs
Canadian Prime Minister Justin Trudeau quickly imposed a 25% duty on $106.5 billion worth of U.S. goods in reaction to Trump’s statement. China’s Ministry of Commerce, meanwhile, declared that it would take steps and lodge a protest with the World Trade Organization (WTO).
In order to protect Mexico’s economic interests, Mexican President Claudia Sheinbaum announced a “Plan B” approach on X (previously Twitter), instructing the Secretary of Economy to implement tariff and non-tariff measures.
As a result of these events, Bitcoin fell below the psychologically critical $100,000 threshold, hitting its lowest level since January 27 at $99,111. According to CoinMarketCap, Bitcoin is currently trading at $99,540.
About $22.7 million in long bets were liquidated in the four hours prior to the most recent price decline, according to market data from CoinGlass.
The Crypto Industry Is Still Split on the Effect of Tariffs
egarding how the tariffs would affect Bitcoin and the market as a whole, the larger cryptocurrency community is still divided.
The founder of Crypto Capital Venture, Dan Gambardello, downplayed worries that the tariffs would put a stop to Bitcoin’s upward trend.
“It’s unbelievable that there’s a widespread belief that Trump’s tariffs and his memecoins put an end to the bull cycle,” he said.
In the meantime, Bitwise Invest’s head of alpha strategies, Jeff Park, hypothesized that a protracted trade war would eventually be advantageous for Bitcoin. But this optimism is not shared by other analysts.
According to Cinneamhain Ventures partner Adam Cochran, Bitcoin is still closely linked to international financial markets and is acting more like a leveraged technology stock than a real hedge.
“An economic squeeze of this scale just means pain all around, and we should be okay with denouncing that,” he stated.
Geopolitical tensions have made Bitcoin’s price volatility worse, so investors are keeping a careful eye on any new trade developments and how they can affect the cryptocurrency market.
