Bitcoin and major cryptocurrencies rebounded after a temporary delay of trade tariffs by U.S. and Mexican leaders, recovering from steep declines due to trade war fears. Bitcoin jumped nearly $4,000, while Solana and Ethereum also rose significantly. However, analysts caution about potential future volatility and inflation impacts on crypto values.
Bitcoin and other major cryptocurrencies experienced a notable rebound on Monday, following an agreement between U.S. President Trump and Mexican President Sheinbaum to delay a set of 25% tariffs for one month. This temporary pause came as fears of a looming trade war had sent crypto values tumbling. Bitcoin, which briefly dipped to $92,460, quickly surged back to $101,000 in response to this announcement, while other cryptocurrencies, like Solana and Ethereum, also saw significant increases in their prices.
The turbulence in the crypto market stemmed from President Trump’s initial threats of tariffs announced over the weekend, intended to combat illegal migration and fentanyl trafficking. Early Monday morning, Trump confirmed on Truth Social that discussions with Sheinbaum resulted in the decision to postpone the tariffs, allowing more time for negotiations. This shift in policy catalyzed a rapid recovery, with Bitcoin rising nearly $4,000 within an hour to a high of $101,950 before stabilizing at around $101,200. Solana climbed to $207, and Ethereum approached $2,500 as well.
Despite the positive market response, analysts advise caution. Bernstein highlighted the potential short-term consequences of tariffs leading to a stronger dollar and higher inflation, which could diminish cryptocurrency appeal. Nevertheless, Bitcoin is often viewed as a hedge against monetary debasement, maintaining its long-term value. Analysts observed that while cryptocurrencies are closely tied to risk assets in the short run, they possess enduring value that could withstand market fluctuations.
This market recovery comes on the heels of substantial liquidations, especially in Ethereum, which had suffered an 18% decline, contributing to $2.3 billion in liquidations overall. The announcement of the tariff pause allowed many of the hardest-hit cryptocurrencies to regain some ground, fostering optimism among investors.
While uncertainties persist in the crypto landscape, the temporary tariff suspension has offered a moment of relief, allowing the cryptocurrency market to breathe amid ongoing volatility.
In summary, the recent decision to delay trade tariffs has sparked an impressive rebound in the cryptocurrency market, particularly for Bitcoin, Solana, and XRP. Despite the short-term surge, analysts remain cautious, citing longer-term concerns about inflation and market volatility. Nonetheless, the brief pause provides a chance for the crypto world to regroup and stabilize after experiencing significant upheaval.
Original Source: coinmarketcap.com
