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Trump Reignites The Trade War, Bitcoin Plunges Below $100,000

Sun 02 Feb 2025 ▪ 3 min read ▪ by Fenelon L.
Getting informed Bitcoin (BTC)

The bitcoin has experienced a significant drop, falling below the symbolic threshold of 100,000 dollars for the first time since January 27. This drop occurs in a context of increased trade tensions, following Donald Trump’s announcement of new tariffs targeting China, Canada, and Mexico, provoking immediate reactions from these countries.

Economic event in support of Bitcoin

Bitcoin plummets below $100,000 after Trump measures

American President Donald Trump signed a decree imposing major tariffs on imports from three key countries. The measure entails a 25% increase in tariffs on Canadian and Mexican imports, while Chinese products face a 10% hike.

Only Canadian energy resources benefit from a reduced rate of 10%. This decision, according to the White House, aims to compel these countries to strengthen their fight against illegal immigration and the trafficking of illicit substances, particularly fentanyl.

The financial markets reacted quickly to this announcement, with bitcoin dropping to as low as 99,111 dollars before stabilizing around 99,540 dollars. Data from CoinGlass reveals that this drop led to the liquidation of approximately 22.70 million dollars in long positions in just four hours.

Analysts fear that these tariff measures could contribute to rising inflation, potentially leading the Federal Reserve to maintain high interest rates. This perspective generally encourages investors to favor more traditional assets over cryptocurrencies.

A unanimous international reaction and divided perspectives

In response to these measures, the targeted countries did not hesitate to retaliate. Canadian Prime Minister Justin Trudeau announced immediate reprisals with a 25% tax on 106.5 billion dollars worth of American products.

China promised to take the matter to the WTO, while Mexican President Claudia Sheinbaum ordered the implementation of a “Plan B” which includes various retaliatory measures.

Within the crypto community, opinions differ regarding the long-term implications of this situation. Dan Gambardello, founder of Crypto Capital Venture, downplays the impact of these measures, emphasizing that BlackRock continues to accumulate ETH and BTC despite the panic among retail investors.

In contrast, Adam Cochran of Cinnaeamhain Ventures warns about bitcoin’s vulnerability to global economic turbulence.

The current crisis illustrates the growing interaction between traditional markets and cryptocurrencies, as the sector evolves in the face of geopolitical tensions. The coming weeks will be crucial to determine whether this correction is temporary or indicative of a deeper trend change. Meanwhile, Donald Trump’s return to the White House marks a major break, disrupting American politics in just one week.

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Fenelon L. avatar
Fenelon L.

Passionné par le Bitcoin, j'aime explorer les méandres de la blockchain et des cryptos et je partage mes découvertes avec la communauté. Mon rêve est de vivre dans un monde où la vie privée et la liberté financière sont garanties pour tous, et je crois fermement que Bitcoin est l'outil qui peut rendre cela possible.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.