Bitcoin fell below $100,000 for the first time since January 27 after U.S. President Donald Trump announced import tariffs on goods from China, Canada, and Mexico. This decision quickly led to retaliatory actions from those countries, causing Bitcoin’s price to drop.
On February 1, the White House outlined the new tariffs: a 25% additional tax on imports from Canada and Mexico, and a 10% additional tariff on goods from China. Energy resources from Canada, however, will face a lower 10% tariff. The administration’s stated goal behind these tariffs is to hold these countries accountable for their commitments to curb illegal immigration and the flow of harmful drugs like fentanyl into the US.
Impact on Bitcoin and Broader Market
These tariffs could drive inflation up, which might result in higher interest rates.Typically, higher rates cause investors to move away from riskier assets like crypto and toward more traditional assets such as bonds and term deposits.
Retaliation from the Three Countries
After Trump’s announcement, the three countries wasted no time retaliating. Canadian Prime Minister Justin Trudeau revealed plans to impose a 25% tariff on $106.5 billion worth of U.S. goods. China’s Ministry of Commerce stated it would file a complaint with the World Trade Organization (WTO) and take necessary countermeasures. Meanwhile, Mexican President Claudia Sheinbaum announced that she had instructed the Secretary of Economy to put “plan B” into action, which involves both tariff and non-tariff measures to safeguard Mexico’s interests.
As a result, Bitcoin slipped below the critical $100,000 mark, dropping to $99,111. By the time this article was published, Bitcoin was trading at $99,540, according to CoinMarketCap. CoinGlass data also showed that roughly $22.7 million in long positions were liquidated during the four hours leading up to the report.
Crypto Industry Divided on Tariff Impact
The crypto industry remains divided over how the tariffs will impact the market. Dan Gambardello, founder of Crypto Capital Venture, strongly disagrees with the idea that Trump’s tariffs have ended the bull cycle. He expressed disbelief, saying, “I cannot believe there’s a popular opinion floating around that Trump tariffs and his memecoins ended the bull cycle.” Gambardello pointed out that while retail investors might be worried due to the market consolidation, institutional investors, such as BlackRock, are still actively accumulating Ethereum (ETH) and Bitcoin (BTC).
On the other hand, Jeff Park, head of alpha strategies at Bitwise, argued that a prolonged tariff war could actually be beneficial for Bitcoin in the long term. However, not all experts share this optimistic view. Adam Cochran, a partner at Cinnaeamhain Ventures, believes Bitcoin is still too closely tied to global markets, much like a highly-leveraged tech stock. He warned that a major economic squeeze would hurt all markets, including crypto.
Conclusion:
The recent fall in Bitcoin’s price below the $100,000 level highlights the market’s sensitivity to macroeconomic factors, including tariffs and geopolitical tensions. While some analysts believe the long-term outlook for Bitcoin is still positive, the immediate future remains uncertain as the market adjusts to these new developments. Investors will need to monitor global economic conditions, tariff responses, and broader market sentiment to gauge Bitcoin’s next move.
FAQs:
Why did Bitcoin fall below $100,000?
Bitcoin’s drop below $100,000 was primarily due to President Trump’s imposition of tariffs on imports from China, Canada, and Mexico, which led to retaliatory measures from these countries and concerns over inflation and higher interest rates.
How did the tariffs affect the crypto market?
The tariffs could raise inflation, potentially leading to higher interest rates, which typically causes investors to move away from riskier assets like Bitcoin and into more traditional assets like bonds and term deposits.
How did other countries respond to Trump’s tariffs?
Canada imposed a 25% tariff on $106.5 billion worth of US goods, while China and Mexico also planned their own countermeasures in response to Trump’s actions.
I am Toby Rothschild, Co-Founder of Spearmint and author at Coinography, and a strategist focused on advancing Web3 innovation, digital ecosystems, and the future of decentralized technology. I combine product thinking, creative leadership, and deep interest in emerging trends to help shape how individuals and organizations interact with the next generation of digital systems.
My work centers on understanding how blockchain, AI, and digital identity are reshaping global industries. At Spearmint, I help lead the direction of initiatives that bring clarity, structure, and meaningful user experiences to complex technological environments. I focus on bridging vision with execution, ensuring that innovation remains practical, scalable, and aligned with long-term growth.
As an author at Coinography, I create insights that translate fast-moving Web3 developments into clear, useful narratives. I explore topics such as decentralized governance, digital identity, creator economies, token models, protocol design, and the shifting cultural patterns around emerging technology. My aim is to make digital transformation more understandable and approachable for a wider audience.
I believe that Web3 is not only a technological shift but a cultural and creative one. Strong ideas, thoughtful communication, and human-centered design will shape which technologies thrive and how communities evolve around them. My writing and research reflect this belief, focusing on clarity, relevance, and long-term perspective.
Professional Links Website: https://coinography.com LinkedIn: https://www.linkedin.com/in/tobyrothschild/
