Bitcoin’s price tumbled below the $100,000 mark on Sunday following President Trump’s announcement of new tariffs on imports from Canada, Mexico, and China. This move triggered a significant downturn in the cryptocurrency market, raising concerns about Bitcoin’s future and its correlation with traditional markets. Trump’s executive order, signed on February 1st, imposes a 25% tariff on Canadian and Mexican imports and a 10% tariff on Chinese goods, including a reduced 10% tariff on Canadian energy imports. The White House cited national security concerns, illegal immigration, and the fentanyl crisis as justification for the tariffs.
The announcement immediately impacted the crypto market, resulting in $540 million in liquidations, with Bitcoin long positions accounting for $22.7 million. Bitcoin briefly fell to $99,111 before stabilizing but still recorded a 7.15% loss over the week. Meme coins experienced the most significant impact, with the GMCI Solana Memes index plummeting 13% in 24 hours and 30% over the week. Trump’s own meme coin dropped 7% in a day and 30% for the week, while Melania Trump’s coin declined 5% in 24 hours and 38% over the week. Nineteen of the top 20 meme coins suffered losses exceeding 20% in the past week, with Shiba Inu declining by 17.3%.
Canada, Mexico, and China responded quickly to the tariffs. Canadian Prime Minister Justin Trudeau implemented retaliatory tariffs on $155 billion worth of U.S. goods. China announced its intention to file a lawsuit with the World Trade Organization, and Mexican President Claudia Sheinbaum confirmed that Mexico would introduce its own tariffs and countermeasures.
Market analysts are divided on the future of Bitcoin. Jeff Park from Bitwise suggests that increased economic uncertainty could drive more investors towards crypto, potentially strengthening Bitcoin in the long run. Conversely, Adam Cochran from Cinneamhain Ventures argues that Bitcoin remains linked to traditional market trends and could face challenges if broader financial markets continue to decline. Nic Puckrin, CEO of Coin Bureau, cautioned that continued market instability could signal the end of Bitcoin’s recent bull run.
Trump defended the tariffs on Truth Social, proclaiming, “THIS WILL BE THE GOLDEN AGE OF AMERICA! WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!). BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID.”
Bloomberg Economics estimates that these tariffs will raise U.S. tariff rates to their highest levels since the 1940s. With growing concerns about inflation, investors are exercising increased caution. Some view Bitcoin as a hedge against economic instability, while others interpret its recent losses as a broader indicator of risk aversion. Institutional investors, such as BlackRock, continue to accumulate Bitcoin and Ethereum, demonstrating confidence in the long-term potential of cryptocurrencies.
As of this writing, Bitcoin is trading at $97,400, struggling to maintain the six-figure price level. The cryptocurrency market remains highly susceptible to geopolitical events, and uncertainty persists regarding the impact of the tariff dispute on global trade and investment. The situation warrants close monitoring as the interplay between global economics and cryptocurrency markets continues to unfold.
