Bitcoin Drops Below $100,000 for the First Time in Six Days as U.S. Announces New Tariffs

On Feb. 1, they signed an executive order that increased worldwide trading tension and surprised the cryptocurrency community.

Bitcoin dropped below the $100,000 mark for the first time in six days on Monday following an announcement by U.S. President Donald Trump of new tariffs for Chinese, Canadian, and Mexican imports, sparking a heated discussion on the future impact on crypto markets.

On Feb. 1, Trump administration officials announced an executive order that raised worldwide trading tension and came as a surprise to the cryptocurrency community.

According to the White House, Trump’s tariffs include a 25% tariff on Canadian and Mexican imports and a 10% tariff on Chinese imports. Canadian energy imports will face a lower 10% tariff. The administration framed the move as a desire to make these countries pay for “ending illegal immigration” and curbing the flow of illicit drugs, including fentanyl.

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The reaction from countries under the impact was swift. Canadian Prime Minister Justin Trudeau announced retaliatory tariffs of 25% on $106.5 worth of U.S. goods. China’s Ministry of Commerce, in turn, said it will file a case with the World Trade Organization (WTO) and threatened “corresponding countermeasures.” Mexican President Claudia Sheinbaum said her government will apply a “plan B” with tariff and non-tariff tools to defend Mexico’s interests.

The immediate financial impact is clear: tariffs have a potential to fuel inflation, which then prompts central banks to raise interest rates. That tends to drive investors out of risk assets like cryptocurrencies and into safer ones like bonds and term deposits.

Bitcoin’s drop to $99,111 on CoinMarketCap is a mental blow to the market, having savored its position over the six-figure level since the closing days in January. CoinGlass data shows $22.7 million in long positions getting liquidated four hours following the report, attributing the volatility at work

The crypto community is split on the long-term consequences of the tariffs, with some downplaying the impact and others arguing that the market turbulence is a symptom of a deeper malaise.

Dan Gambardello, a founder at Crypto Capital Venture, played down concerns the tariffs will put an end to the bull run.

“I cannot believe that a general perception out there is that Trump tariffs and Trump memecoins killed bull run,” Gambardello said. Institutional Bitcoin and Ethereum buying, in his view, is an expression of faith in the base of the market. “BlackRock continues buying ETH and BTC and retail frantically panicking because crypto is in a stage of consolidating.”

I cannot believe there’s a popular opinion floating around that Trump tariffs and his memecoins ended the bull cycle

Blackrock is continuing to accumulate ETH and BTC while retail frantically panics because crypto is currently consolidating

Others, however, are less sanguine. Adam Cochran, a principal at Cinneamhain Ventures, argued that Bitcoin’s performance is too closely linked with macroeconomics to go entirely unscathed.

“Bitcoin isn’t decoupled enough with the global markets and acts in a similar manner triple-levered technology today,” Cochran said. “An economic squeeze of such magnitude simply involves agony everywhere, and we have to be okay with decrying that.”

Tariff Wars and Bitcoin’s Future Impact

Bitwise Invest’s head of alpha strategies, Jeff Park, sounded even more positive on the matter.

“How amazing a tariff war prolonged will be for Bitcoin in the long run,” Park noted, predicting that the ongoing uncertainty in the world economy will make Bitcoin even more attractive as a hedge for traditional markets.

You simply have not yet grasped how amazing a sustained tariff war is going to be for Bitcoin in the long run

The current market reaction highlights Bitcoin’s dual function as both a speculative investment and a hedge against traditional market volatility. While institutional demand for the leading cryptocurrency remains strong, retail investors are showing signs of skittishness in response to the macroeconomic uncertainty.

As the tariff standoff continues, the cryptocurrency market will likely become a battleground between two camps—one that bets on its long-term resilience and another that sees it as being at the mercy of global economic trends. For now, everyone is holding their breath as Bitcoin navigates this high-stakes financial scenario.

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