Bitcoin (BTC) experienced a sharp price reversal from its $100k mark as China ushered in retaliatory tariffs on the United States. The apex coin had since fallen to approximately $98,500, according to Coingecko data.
The downturn followed a period of significant gains fueled by positive developments in US-Mexico-Canada trade relations and the announcement of a novel US sovereign wealth fund.
Furthermore, China’s swift and substantial retaliatory tariffs against the United States effectively halted the upward momentum, highlighting the delicate interconnectedness between geopolitical events and the performance of digital assets.
Short-Lived Crypto Market Optimism
The day began with a surge in optimism. The postponement of US tariffs on Mexican and Canadian goods and President Trump’s executive order establishing a sovereign wealth fund spurred a rapid increase in BTC’s value, exceeding $10,000 in a single day and briefly pushing it above $102,000.
This positive market sentiment was further amplified by the anticipation surrounding a news conference scheduled for 2:30 p.m. Eastern Time. The conference, featuring White House cryptocurrency director David Sacks, promises to unveil a detailed US digital asset policy.
In an X post, Trader Jelle described the day as potentially “big,” reflecting widespread expectations of significant policy announcements that would position the US as a global leader in digital assets.
In response to the newly implemented 10% US tariff on all Chinese imports, Beijing levied its tariffs, targeting key commodities such as oil, coal, and agricultural equipment.
Effective February 10th, these measures signaled a renewed escalation in the trade war between the world’s two largest economies.
Furthermore, China announced an antitrust probe into Google and added several US companies, including PVH Corp and Illumina, to its list of unreliable entities, further intensifying the geopolitical tension.
What Trump’s Exec Order Could Mean for Crypto
Trump signed an executive order. He directed Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick, both pro-crypto, to initiate a process aiming to create an American sovereign wealth fund.
Trump told reporters they would create significant wealth for the fund, adding that the country needed one. Bessent described the fund as a combination of liquid assets and existing domestic assets, planning to make them available to Americans.
According to NBC, he stated that they would establish the fund within the following year. Following the signing, Wyoming Senator Cynthia Lummis posted on X, “This is a Big deal,” hinted that the fund might purchase BTC.