Bitcoin has just topped $100,000! It bounced back after news of U.S. tariffs, showing that the cryptocurrency market is recovering. This market struggled when President Trump announced new tariffs on goods from Canada and Mexico.
On February 3, 2025, Trump set a 25% tariff on goods from these countries and a 10% tariff on Canadian energy. This caused a shock in the global market and fears of a trade war. The total value of cryptocurrencies dropped by 11.9%, falling to about $3.16 trillion. Investors panicked, leading to a massive liquidation event that wiped out over $2.3 billion in just one day.
But on February 4, hope returned. Trump announced a one-month delay on the tariffs after speaking with Mexican President Claudia Sheinbaum. Sheinbaum promised to send 10,000 troops to the U.S.-Mexico border to help with security. Canadian Prime Minister Justin Trudeau also promised better cooperation, easing fears for investors.
Following this news, Bitcoin jumped from about $92,000 to around $101,000—a gain of over 6.3%. Ethereum also rose from $2,368 to about $2,800, a 14.5% increase. Eric Trump’s tweet promoting Ethereum helped boost confidence, although some questioned his motives.
Other cryptocurrencies, like Solana (SOL), went up 12.6% to about $216. Newer tokens like SUI and XRP soared even higher, jumping 38% and 36%, respectively. SUI traded at $3.61, while XRP hit $2.75. This strong recovery reassured many in the market, showing strength among both famous and new tokens.
However, large liquidations still worry analysts. This recent event was even bigger than those during the COVID-19 crash and the late 2022 FTX crisis. Some estimates suggest total liquidations could reach $8-10 billion, raising concerns about the health of the cryptocurrency market.
As investors adjust, caution remains. The short relief from tariff delays does not fix ongoing global trade issues, especially with tensions high in the EU and Asian markets. Experts urge potential investors to be careful, stressing the volatile nature of cryptocurrency and the need for thorough research before taking risks.
As the market moves through these challenges, all eyes will be on the next month. Will the positive mood last, or will the threat of tariffs return? The world of cryptocurrency is full of chances and risks, urging both experienced traders and newcomers to tread carefully in these uncertain waters.
Featured Image: AI-Generated
