Bitcoin Drops Below $100,000 as Trump Imposes New Tariffs on Canada, Mexico, and China

Bitcoin fell below $100,000 on Sunday after President Trump announced new tariffs on imports from Canada, Mexico, and China, causing a sharp downturn in the cryptocurrency market. The executive order, signed on Feb. 1, imposes a 25% tariff on Canadian and Mexican imports and 10% on Chinese goods, including a reduced 10% tariff on Canadian energy imports. The White House cited national security concerns, illegal immigration, and the fentanyl crisis as justification.

Following the announcement, the crypto market saw $540 million in liquidations, with Bitcoin long positions alone accounting for $22.7 million. Bitcoin briefly dipped to $99,111 before stabilizing and lost 7.15% over the past week. Meme coins were hit the hardest, with the GMCI Solana Memes index falling 13% in the last 24 hours and 30% over the past week. Trump’s meme coin dropped 7% in a day and 30% for the week, while Melania Trump’s coin fell 5% in 24 hours and 38% over the week. Nineteen of the top 20 meme coins lost over 20% in the past week, with Shiba Inu declining 17.3%.

Canada, Mexico, and China reacted swiftly. Canadian Prime Minister Justin Trudeau imposed counter-tariffs on $155 billion worth of U.S. goods. China announced it would file a lawsuit with the World Trade Organization, and Mexican President Claudia Sheinbaum confirmed Mexico would introduce its own tariffs and other measures.

Market analysts remain divided on Bitcoin’s outlook. Jeff Park from Bitwise believes economic uncertainty could push more investors into crypto, making Bitcoin stronger in the long term. Others, like Adam Cochran from Cinneamhain Ventures, argue that Bitcoin remains tied to traditional market trends and could struggle to recover if broader financial markets continue to fall. Nic Puckrin, CEO of Coin Bureau, warned that if market instability continues, Bitcoin’s recent bull run may end.

Trump defended the tariffs on Truth Social, saying, “THIS WILL BE THE GOLDEN AGE OF AMERICA! WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!). BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID.”

Bloomberg Economics estimates that the tariffs will push U.S. tariff rates to their highest levels since the 1940s. With inflation concerns rising, investors are becoming more cautious. Some view Bitcoin as a hedge against economic instability, while others see its recent losses as a sign of broader risk aversion. Institutional investors like BlackRock continue to accumulate Bitcoin and Ethereum, suggesting confidence in crypto’s long-term potential.

As of writing, Bitcoin is trading at $97,400, struggling to hold the six-figure price level. The crypto market remains highly sensitive to geopolitical events, with ongoing uncertainty about how the tariff dispute will impact global trade and investment.