Bitcoin stumbled this week as U.S. President Donald Trump announced new tariffs on steel and aluminum. The announcement marks another chapter in the escalating U.S. trade war and sent shockwaves through the crypto markets.
On February 9, Trump declared that a 25% tariff would apply to all incoming steel and aluminum. According to a report from the Associated Press, he emphasized that the U.S. would impose reciprocal tariffs on countries that charge import fees on American goods. “If they are charging us 130% and we’re charging them nothing, it’s not going to stay that way,” he stated.
The immediate aftermath saw crypto markets dip significantly. Bitcoin, which had been on a steady recovery, fell briefly to $94,000 before bouncing back above $97,000. As of now, Bitcoin trades at approximately $97,847, showing resilience despite the initial scare.
Ether, the second-largest cryptocurrency, also felt the impact. It dropped to $2,537 but has since climbed back to around $2,645. Overall, the total crypto market cap decreased from $3.15 trillion to $3.10 trillion but has since rebounded slightly to $3.13 trillion.
Investor sentiment remains shaky, as indicated by the Crypto Fear & Greed Index. For the past week, the index has hovered in fear territory, averaging a score of 44 out of 100. The latest update on February 10 shows a score of 43, a slight decline from 46 the day before.
Trump’s recent tariffs are not isolated. Since February 1, he has threatened a 25% tariff on major trading partners like Canada and Mexico, along with a 10% tariff on China. The previous announcements led to a market crash, with estimates suggesting liquidations may have reached between $8 billion and $10 billion.
Despite the uncertainty, the crypto market has shown resilience before. Following the suspension of tariffs on Canada and Mexico on February 3, the market rebounded. However, Trump has indicated he may reinstate the tariffs after the 30-day pause, leaving investors on edge.
As the situation unfolds, the crypto community will be watching closely. With tariffs looming, the market’s future remains unpredictable.
