- China responds to U.S. tariffs, which trigger a massive crypto loss of over $2 billion in liquidations.
- Bitcoin trades above $91k while altcoins suffer losses in the global market.
The cryptocurrency market witnessed another hit on 3rd, February 2025, as China responded to Trump’s US tariff implementation. In retaliation, China imposed a 10-15% tariff on American goods and launched an antitrust probe into Google.
Following this, Bitcoin fell to a three-day low of $91,541, and Ethereum lost nearly 25% of its value on Monday, marking its worst three-day decline since November 2022. Despite geopolitical tension, the crypto market continues to recover with some steady highs. At press time, the overall cryptocurrency market cap stands at $3.25 trillion, an increase of 4.48% in the last 24 hours.
Beijing’s moves are a response to Trump’s 10% Tariff on China, which took effect on Tuesday. China also announced new tariffs of 10-15% on U.S. goods, including coal, oil, and agricultural equipment.
Additionally, China stated that it plans to impose further tariffs. In a post on X, China said, “China to impose additional tariffs on selected U.S. imports starting February 10.”
A sharp reaction arose in the crypto market followed with over $2.2 billion in liquidations and a quarter of the top 100 crypto tokens plunging by 20% on Feb 3.
Market Resilience Pushes Gradual Recovery Amidst Dip
Despite the widespread sell-off, Bitcoin’s decline was comparatively milder than Ethereum and other altcoins. Although the global crypto market is currently in its recovery phase, this rebound is largely attributed to the U.S.-Canada tariff pause. The market is now adapting and gradually absorbing the losses.
Bitcoin saw a 4.23% price increase in the last 24 hours, Ethereum gained 6.8%, and other altcoins made significant jumps. This reflects a broader risk-off sentiment among investors, as they respond to the positive development in trade tensions.
Bitcoin is now trading at $99,000 and is eyeing a target of $105,000, fueled by David Sack’s recent policy update.
Market Uncertainty Remains as Trade War Risks Mount
While analysts see China’s retaliation as measured, the risk of further escalation looms large. U.S. stock futures and commodities also took a hit, with NASDAQ 100 futures down 1.7%, crude oil falling 1.74%, and natural gas plunging 2%.
Canadian Prime Minister Justin Trudeau confirmed that the U.S. is pausing tariffs on Canadian goods for at least 30 days after a call with President Trump on Monday.
“I just had a good call with President Trump,” Trudeau wrote on X, adding that both nations are working on solutions.
As part of the agreement, Canada will roll out a $1.3 billion border plan, reinforcing security with helicopters, advanced technology, and additional personnel to curb the flow of fentanyl.
The move follows a similar one between the U.S. and Mexico earlier in the day. President Trump had announced a delay in tariffs on Mexico after a pledge from Mexico’s President to deploy 10,000 to the border to combat illegal migration.
Market participants had been anticipating that Canada would negotiate similar terms and Trudeau’s statement confirmed those expectations.
“Proposed tariffs will be paused for at least 30 days while we work together,” he wrote.
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