Earlier this week, Donald Trump’s decision to postpone planned tariffs on imports from Mexico and Canada was announced and the markets did not wait long. Not only the stock markets reacted, but also the cryptocurrency markets. After the announcement of the postponement of the tariffs, the value of Bitcoin climbed back above $100,000, recovering from the previous decline, which was approximately $91,229 over the weekend.
The original plan was for the Trump administration to impose new tariffs on imports from Mexico and Canada as part of the economic pressure on those countries related to trade negotiations and migration. The duties were to increase gradually and could have reached up to 25% on selected goods. However, after negotiations with trading partners, the US Government decided to postpone their introduction for 30 days, which brought an easing in the markets. However, some measures, such as stricter import controls on certain commodities, remain in place.
Traditional financial markets had a mixed reaction to Trump’s announcement. US stock indices, such as the Dow Jones Industrial Average and the S&P 500, closed Monday’s trading with slight losses, although they managed to recover from deeper daily declines.
It is cryptocurrencies that often react to macroeconomic uncertainty as traders seek liquidity in times of market stress, and this was no different. Following the announcement of the tariff suspension, Bitcoin’s price surged above $100,000 on Monday evening.
However, when we look at the evolution of the cryptocurrency over the past month, we see jumps up and down based on the President’s various statements. Despite some investors’ expectations that Bitcoin could serve as a store of value in times of economic uncertainty, its recent price movements sort of suggest that it is still evolving similarly to risk assets. Its value continues to be affected by the political situation as well as factors such as the strength of the dollar, inflation expectations and liquidity conditions.
