In a dramatic turn of events, Bitcoin (BTC) has fallen below the crucial $100,000 threshold for the first time since January 27. This downturn follows the recent announcement by former President Donald Trump, who imposed import tariffs targeting goods from Canada, China, and Mexico. The tariffs have not only provoked a swift response from these nations but have sent ripples through the crypto market.
According to Trump’s executive order, a 25% additional tariff will be levied on imports from Canada and Mexico, while a 10% tariff will affect imports from China. The White House stated that these measures are designed to hold these countries accountable for their commitments to curb illegal immigration and the influx of dangerous drugs.
The immediate reactions from the affected countries have escalated tensions. Canadian Prime Minister Justin Trudeau announced a retaliatory tariff of 25% on $106.5 billion worth of U.S. goods, while the Chinese Ministry of Commerce is preparing to lodge a complaint with the World Trade Organization (WTO). Meanwhile, Mexican President Claudia Sheinbaum disclosed plans to implement various measures to defend Mexico’s economic interests.
As a result of this geopolitical turbulence, the price of Bitcoin plunged to a low of $99,111 before recovering slightly to $99,540 at the time of reporting. Data from CoinGlass indicated that around $22.70 million in long positions were liquidated in the hours leading to this drop, further amplifying the market’s bearish sentiment.
Within the crypto community, opinions are divided on the implications of these tariffs. Figures like Dan Gambardello, founder of Crypto Capital Venture, expressed skepticism about the narrative that tariffs and a focus on meme coins are responsible for the current downturn. On the other hand, some analysts, including Adam Cochran from Cinnaeamhain Ventures, warned that the intertwining of Bitcoin with broader market dynamics means that a significant economic squeeze could spell trouble for the cryptocurrency as well.
This ongoing chapter in global trade and its influence on cryptocurrencies reminds investors of the fragile interconnections between traditional financial markets and digital assets. As further retaliations unfold, only time will tell how Bitcoin and the overall crypto market will respond.
