Emmanuel Ochayi
The crypto market experienced a rebound after U.S. President Donald Trump agreed to halt proposed tariffs on Canada and Mexico temporarily as reported by Prime Business Africa. This decision comes as negotiations with the two neighbouring countries continue.
Bitcoin, the leading cryptocurrency, surged past the $100,000 mark, reaching $101,731 on Monday. This recovery follows a dip to $91,229 over the weekend, marking its lowest point since January 13.
Join our WhatsApp ChannelLeaders Announce Tariff Pauses
On February 3, Canadian Prime Minister, Justin Trudeau announced that, following a phone call with President Trump, the 25% tariffs would be paused for at least 30 days. Both nations plan to collaborate on border security and related issues.
“Canada is implementing our $1.3 billion border plan—reinforcing the border with new helicopters, technology, and personnel, enhancing coordination with our American partners, and increasing resources to stop the flow of fentanyl. Nearly 10,000 frontline personnel are and will be working on protecting the border,” Trudeau stated.
He added, “In addition, Canada is making new commitments to appoint a Fentanyl Czar, list cartels as terrorists, ensure 24/7 monitoring of the border, launch a Canada-U.S. Joint Strike Force to combat organized crime, fentanyl, and money laundering, and back it with $200 million. Proposed tariffs will be paused for at least 30 days while we work together.”
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Similarly, Mexican President Claudia Sheinbaum confirmed that tariffs have been paused for a month. She emphasised a shared commitment to strengthening the border.
“Our teams will begin working today on two fronts: security and trade. They are pausing tariffs for one month from now,” Sheinbaum said.
Market Reactions to Tariff Developments
The crypto market’s response to these announcements has been notably positive. Bitcoin’s rise above $100,000 reflects renewed investor confidence. Ether, the second-largest cryptocurrency by market capitalisation, also showed improvement. After reaching a low of $2,814, it has since recovered, trading at $2,880.
The Crypto Fear & Greed Index, which measures market sentiment for Bitcoin and other cryptocurrencies, has shifted into greed territory with a score of 72 out of 100, indicating increased investor optimism.
Analysts Weigh In
Financial analysts suggest that the pause in tariffs has alleviated some economic uncertainties, contributing to the crypto market’s rebound. The initial tariff announcements had strengthened the U.S. dollar, leading to a decline in cryptocurrencies and Asian equities.
“Cryptocurrencies often sell off during macroeconomic uncertainty and provide liquidity due to their 24/7 trading nature, particularly on weekends when traditional markets are closed,” noted a market analyst.
Despite hopes that Bitcoin could act as a store of value, it has traded in line with risk assets, influenced by dollar strength, inflation expectations, and liquidity conditions.
Broader Economic Implications
While the crypto market has benefited from the tariff pause, broader financial markets remain cautious. U.S. stocks ended lower on Monday, reflecting ongoing concerns about global trade tensions. Industries such as automotive and technology have been particularly affected by the tariff announcements. Companies like General Motors, Ford, Tesla, and Nvidia experienced stock price declines.
Analysts warn that these tariffs could hinder global economic growth and impact inflation, potentially disrupting central banks’ efforts to cut interest rates.
Future Outlook
As negotiations between the U.S., Canada, and Mexico continue, the crypto market remains sensitive to policy changes. Investors are closely monitoring developments, understanding that the current pause is temporary.
President Trump has indicated that if agreements are not reached within the 30-day window, tariffs could still be implemented. “We haven’t agreed on tariffs yet,” he mentioned in an interview, suggesting that the situation remains fluid.
The coming weeks will be crucial in determining the direction of both international trade relations and the cryptocurrency market. Investors are advised to stay informed and exercise caution amidst the evolving landscape.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
