Bitcoin (BTC) has dropped below $100,000 for the first time in six days following US President Donald Trump signing an executive order to impose import tariffs on goods from China, Canada, and Mexico.
The imposed tariffs have already triggered retaliation from the three countries, and the crypto industry is divided on how this will affect the broader market.
According to a Feb. 1 statement from the White House, “Trump is implementing a 25% additional tariff on imports from Canada and Mexico and a 10% additional tariff on imports from China. Energy resources from Canada will have a lower 10% tariff.”
The statement said that “Trump is taking bold action to hold Mexico, Canada, and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country.”
Tariffs could raise inflation, potentially leading to higher interest rates, which typically causes investors to move away from riskier assets like crypto and toward more traditional assets like bonds and term deposits.
The 3 countries were quick to retaliate
Shortly after Trump’s announcement, Canada’s Prime Minister Justin Trudeau announced in a press conference that he will be imposing a 25% tariff on $106.5 billion worth of US goods.
China’s Ministry of Commerce reportedly said it will be filing a complaint with the World Trade Organization (WTO) and “take corresponding countermeasures.”
Mexican President Claudia Sheinbaum said in a lengthy X post that she has instructed the Secretary of Economy to “implement plan B” which includes “tariff and non-tariff measures in defense of Mexico’s interests.”
Following the retaliations, Bitcoin slipped below the psychological $100,000 price level for the first time since Jan. 27, falling to $99,111. At the time of publication, it is trading at $99,540, according to CoinMarketCap.
According to CoinGlass data, around $22.70 million in long positions were liquidated in the four hours leading up to publication.
Crypto industry split on how tariffs will impact market
The crypto industry is divided on how much the imposed tariffs will impact the broader crypto market.
Crypto Capital Venture founder Dan Gambardello isn’t buying into the narrative.
Gambardello said, “I cannot believe there’s a popular opinion floating around that Trump tariffs and his memecoins ended the bull cycle.”
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“BlackRock is continuing to accumulate ETH and BTC while retail frantically panics because crypto is currently consolidating,” Gambardello said.
While Bitwise Invest head of alpha strategies Jeff Park said, “How amazing a sustained tariff war is going to be for Bitcoin in the long run,” not all crypto commentators agreed.
One opponent, Cinnaeamhain Ventures partner Adam Cochran, said, “Bitcoin is not separated enough from the global markets and trades like triple-levered tech these days.”
“An economic squeeze of this scale just means pain all around, and we should be ok with denouncing that,” Cochran said.
Magazine: XRP to $4 next? SBF’s parents seek Trump pardon, and more: Hodler’s Digest, Jan. 26 – Feb. 1
