Key Takeaways:
- Bitcoin fell below $100,000 on account of *****’s imposition of tariffs on the items.
- The crypto community is at odds as to how the tariffs will affect the future.
- The act is a perfect example of where cryptos are not just a market but they fall apart under global political and economic changes as well.
For the first time since January 27th, the price of Bitcoin has plummeted below 100,000 USD, undergoing a major collapse. During that time, ***** signed an executive order introducing import tariffs on products from China, Canada, and Mexico. What took place afterward were these countries firing back immediately and the heated discussion of the whole crypto community over the implication of the entire market. This blog post will sort out the reasons behind this drop in the price, assess the reactions from the impacted countries, as well as bring the readers to diverse viewpoints within the crypto space.
The Catalyst: *****’s Tariffs and Their Immediate Impact
The announcement made by Donald J. ***** about the tariffs and the clashes between the three trade partners are likely to be the major reasons behind the slump in the Bitcoin price. As reported by a White House statement on February 1st, the tariffs of 25% the US imposed on the imports coming from Canada and Mexico, and a 10% tariff on the imports from China. In addition to the above-mentioned tariff hikes, Canadian energy products will incur a 10% tariff only. The statement said that “***** is taking bold action to hold Mexico, Canada, and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country.”
Tariffs can create an inflationary environment that might result in an increase in the rates of interest. This kind of economic situation will trigger investors to opt out of the risky digital currencies and to look for other investments that would be considered safer like bonds and term deposits instead. Investor sentiment was driven by fear, leading to capital outflows from riskier assets like Bitcoin.
More News: ***** Signs Order to form Cryptocurrency Working Group and Prohibits CBDC
Retaliation and Market Panic
As expected, the affected nations were prompt with reactions. Canadian Prime Minister Justin Trudeau publicly declared a 25% tariff on $106.5 billion worth of U.S. commodities. China’s Ministry of Commerce noted that it would submit a complaint against the World Trade Organization (WTO) and meanwhile said that it would “take corresponding countermeasures” as well. The same was the case with Mexican President Claudia Sheinbaum who ordered the Secretary of Economy to put in motion an “alternative course of action” that would involve “tariff and non-tariff measures in defense of Mexico’s interests.”
These counter-reactions, which were numerous, led to further market confusion, and according to the resulting panic, Bitcoin traded at the psychologically important $100,000 threshold, reaching a low of $99,111. Bitcoin’s market cap is currently at about $99,540.
Bitcoin is trading at $99,540 at the time of authoring. Source: CoinMarketCap
CoinGlass data, which came out with the price drop, shows that more than $22.70 million had been liquidated in the four hours before the price dump occurred. This fact confirms the high volatility and fear in the market at that time. It is well-known that panic selling is often followed by great liquidations which in turn the prices decrease even more.
More News: Bitcoin Hits $100,000 – Sets an All-Time High Record
A Divided Crypto Community: Is Bitcoin Affected?
At present, the cryptocurrency industry is sharply divided on the possible long-term outcomes of the tariffs on the larger crypto community.
Optimistic Views
Dan Gambardello, founder of Crypto Capital Venture, doesn’t take seriously the argument of the ex-President of the United States, Donald *****, that tariffs have grounded the capitalization of memecoins. According to him, large investors, e.g., BlackRock, keep on investing in ETH and BTC, whereas retail investors engage in panic selling, hence some buying possibilities come to the surface. Such a perspective entails the belief in the strong blockchain structural fabric and efficient functioning of Bitcoin due to which whatever good is conducted the currency will remain solid and steady.
Similarly, Jeff Park, who is also the Chief of Alpha Strategies at Bitwise Invest, portrayed an unexpectedly optimistic outlook on the matter, arguing, “How amazing a sustained tariff war is going to be for Bitcoin in the long run.” He envisions Bitcoin thriving amid global trade tensions, positioning itself as a unique safe-haven asset—a concept still emerging in the market.
Pessimistic Takes
The risk of getting isolated and left behind has been shared by Adam Cochran, a co-founder of Cinnaeamhain Ventures. He asserts that “Bitcoin is not separated enough.” Cochran also said: “Such a scale economic squeeze is nothing but pain all around.” The view is accentuated by Bitcoin’s growing integration into the regular financial system and at the same time its increased dependence on other risk assets.
| Perspective | Proponent | Key Argument |
| Tariffs are not a major threat, buy the dip | Dan Gambardello (Crypto Capital Venture) | Market panic causes opportunities to buy, while the institutions keep on buying. |
| Trade war benefits Bitcoin long-term | Jeff Park (Bitwise Invest) | It may be that Bitcoin could be a safe place to invest in the time of international trade uncertainty. |
| Tariffs are detrimental to Bitcoin | Adam Cochran (Cinnaeamhain Ventures) | Bitcoin is together with the tech sector and at certain points in an economic downturn, however, it will always be a highly volatile asset. |
The news of the tariff uncertainty indicates that the crypto market is subject to macroeconomics. The sharp price falls are regarded as signals of a recession as well as good entries, thus drawing attention to the influence of worldwide happenings on cryptos. Not only cryptocurrency news but also global economic news will be monitored by the investors since there is an ambiguity regarding the long-term survival of cryptocurrency.
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