Crypto Markets Rebound After Trump Pauses Mexico and Canada Tariffs
Highlights:
- Trump’s tariff suspension spurs recovery in major crypto tokens and markets.
- Bitcoin, Ether, and Solana see impressive gains, sharply reversing steep losses overnight.
- Trump’s new Sovereign Wealth Fund raises hopes for Bitcoin and Ethereum inclusion.
The cryptocurrency market is bouncing back as President Donald Trump agreed to temporarily suspend the proposed import tariffs on Canada and Mexico for 30 days. On Saturday, President Trump signed an executive order imposing a 25% tariff on imports from Canada and Mexico, along with a 10% tariff on Canadian energy and oil and another 10% on China. This caused steep declines in both crypto and traditional financial markets. Bitcoin dropped below $91,500, Ether fell more than 35%, and Solana lost 24%.
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On Feb. 3, Canadian Prime Minister Justin Trudeau announced on X that after a phone conversation with Donald Trump, the 25% tariffs would be temporarily paused for at least 30 days, allowing both countries to work together on a resolution.
However, the tariffs on China remain unchanged. Trudeau announces Canada’s $1.3 billion border plan to enhance coordination with the US, featuring the appointment of a Fentanyl czar, listing cartels as terrorist groups, and reinforcing the US-Canada border with helicopters and additional personnel.
I just had a good call with President Trump. Canada is implementing our $1.3 billion border plan — reinforcing the border with new choppers, technology and personnel, enhanced coordination with our American partners, and increased resources to stop the flow of fentanyl. Nearly…
— Justin Trudeau (@JustinTrudeau) February 3, 2025
Mexico’s tariffs have also been suspended for a month. President Claudia Sheinbaum announced on February 3 via X that both leaders had reached several agreements, including a commitment to strengthen the shared land border. “Our teams will begin working today on two fronts: security and trade. They are pausing tariffs for one month from now,” Sheinbaum said.
This is absolutely insane:
Just 48 hours after the trade war began, President Trump has reached a deal with BOTH Canada and Mexico.
This includes both countries deploying 10,000 personnel to monitor the border and reduce drug trade.
US tariffs on Canada and Mexico will be… pic.twitter.com/dodrli66VS
— The Kobeissi Letter (@KobeissiLetter) February 3, 2025
Although temporary solutions have been found, uncertainty persists. In a February 3 interview with Bloomberg TV, Trump emphasized that no conclusive deal had been made and that tariffs on Mexico might still be implemented.
President Trump says the US and Mexico have not agreed on tariffs and they could still go into effect. He says Mexico agreed to send 10,000 National Guard officers to guard the border and stem the flow of fentanyl. He says talks with Canada are ongoing https://t.co/wALUHcJRMC pic.twitter.com/mRPKp4PqIJ
— Bloomberg TV (@BloombergTV) February 3, 2025
Crypto Market Surges as Tariff Suspension Sparks Investor Optimism
As markets absorbed the news of the tariff suspension, several major crypto tokens began to recover. Bitcoin was trading around $98,831 at publication, reflecting a 4.5% increase over the past 24 hours, according to CoinMarketCap data. Ether regained much of its losses, returning to the $2,700 mark, while Solana rose 4% to $204.
Notably, XRP and Sui experienced nearly 15% rebounds from their overnight lows. The wider crypto market has mirrored this trend, with its total market capitalization rising 6.34% in the last 24 hours to hit $3.22 trillion, as per data.
Investor sentiment has improved, as indicated by the rise in the Crypto Fear & Greed Index to 72. This shift signals a move into “greed” after it dropped to a fear-driven low of 44 during the market crash.
Trump’s Sovereign Wealth Fund Boosts Crypto Market Optimism
Meanwhile, Donald Trump recently signed an executive order to create a Sovereign Wealth Fund. This fund aims to secure the country’s long-term economic stability. Given Trump’s pro-crypto stance, market participants are now wondering if Bitcoin and Ethereum will be incorporated into the fund’s assets. If this happens sooner than expected, both the BTC and ETH markets could see significant growth. However, no official confirmations have been provided as of yet.
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Syed Ali Haider
Ali Haider is a contributing crypto writer at Crypto2Community. He is a crypto and blockchain journalist with over six years of experience and has long advocated for digital freedom and cybersecurity. Haider has been featured in several high-profile crypto and finance outlets, including Coincult, AltcoinBeacon, BTCRead, and more.
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