By Key Points:
- Bitcoin drops to $92k, triggering $2 billion in liquidations in just 24 hours.
- Trump’s new tariffs on Canada, Mexico, and China spark fresh inflation concerns.
- Ethereum, XRP, and ADA take major hits, with some altcoins down more than 30%.
- Some analysts say this could actually boost Bitcoin long-term as a hedge against inflation.
Trump’s Tariff Plan Sends Bitcoin Tumbling
Bitcoin Trading Graph – Coinmarketcap
Crypto markets took a beating this weekend after President Donald Trump announced new tariffs on three of the U.S.’s biggest trading partners—Canada, Mexico, and China.
The tariffs, which take effect on Tuesday, include:
- 25% tariffs on Canadian and Mexican imports
- 10% tariffs on Chinese goods
Trump claims this move will protect U.S. manufacturing and tackle border security issues, but economists aren’t convinced. Many warn that these tariffs could drive up consumer prices as businesses pass higher costs onto customers.
Donald Trump says that “people will understand” that prices will go up because of his Trump Tax tariffs to Canada, Mexico, and China.
He campaigned on lowering the price of food and goods, not raising them. pic.twitter.com/P7tHKtOXNQ
— Art Candee 🍿🥤 (@ArtCandee) January 31, 2025
With inflation fears rising, investors dumped risky assets, triggering a sharp selloff in crypto markets.
Crypto Market Wipeout: $2 Billion Liquidated
As panic set in, Bitcoin plunged below $100,000, eventually hitting a low of $92,000. Ethereum followed, dropping 24% to $2,300.
- Bitcoin liquidations hit $421 million
- Ethereum traders lost $528 million
- Total crypto liquidations in 24 hours: $2 billion
Altcoins got hit even harder:
Coinmarketcap Crypto Altcoin Season Index – Bitcoin Drops to $92K as Trump’s New Tariffs Shake Markets
- XRP down 30%
- Cardano (ADA) lost 35%
- Dogecoin (DOGE) sank 30%
- Solana (SOL) and Binance Coin (BNB) fell 15%
The crypto market as a whole shrunk by 8%, wiping out billions in value.
Could Trump’s Tariffs Actually Help Bitcoin?
While the short-term reaction was a market crash, some experts believe these tariffs could actually be good for Bitcoin in the long run.
Why Are Crypto and Global Markets Dumping Right Now?
Let’s break it down in simple terms so everyone understands.
1. Trump’s Tariff Announcement
Former U.S. President Donald Trump recently announced new tariffs on imports from Canada, Mexico, and China.
2. What Does This… pic.twitter.com/73exI1xBGa
— Crypto Shyam (@CryptoShyam) February 3, 2025
A Weaker Dollar = Stronger Bitcoin?
Jeff Park, head of alpha strategies at Bitwise Asset Management, argues that Trump’s aggressive trade moves could set the stage for a Bitcoin boom.
“Plaza Accord 2.0 is coming… and Bitcoin is about to go way higher,” Park wrote on X.
The theory? Tariffs weaken the U.S. dollar, leading to a shift in global finance. If investors lose faith in fiat currencies, Bitcoin could emerge as the go-to store of value.
When the US went off gold in 1971, Nixon imposed a 10% universal tariff on all imports to pressure trade partners into accepting devaluation w/o retaliation.
But before declaring tariffs are inherently bad, consider how US trade continued to dominate the global economy first. pic.twitter.com/Sk0Ma12dMc
— Jeff Park (@dgt10011) February 1, 2025
In other words, while Bitcoin is crashing now, this could actually fuel its next big rally down the line.
What’s Next for Bitcoin?
Right now, Bitcoin is holding around $92,000, with resistance at $98,000. If it breaks lower, it could retest support at $90,000.
🇺🇸 SENATOR LUMMIS SAYS THE USA CAN CUT ITS DEBT IN HALF WITH STRATEGIC #BITCOIN RESERVE 🤯
IT’S HAPPENING 🚀 pic.twitter.com/LTTinqzjm4
— Vivek⚡️ (@Vivek4real_) February 2, 2025
But if analysts like Park are right, we could see a major Bitcoin rally in the coming months—with some predicting $120,000+ before the end of the year.
For now, all eyes are on how global markets react to Trump’s latest economic shake-up.
What's your reaction?
