Bitcoin Price Rebounds To Cross $100,000 Amid Lingering Fears Of Major Crypto Market Upheaval

Sector experts, however, cautioned investors that they should remain vigilant as ongoing geopolitical and macroeconomic shifts are likely to trigger major upheavals in crypto valuations in the near term.

CoinMarketCap data showed bitcoin prices crossing over the 100,000 threshold to $101,731 today – up by 6.57 per cent, after hitting a low of $92,000 the day before after Trump announced massive tariff hikes on Canada, Mexico and China, triggering fears of a trade tariff war.

Ethereum, another leading cryptocurrency, made an even larger gain of over 14 per cent to bounce back to 2,799 on Tuesday from a low of $2,451 a day before.

“Though bitcoin has historically been viewed as a hedge against traditional market volatility, the heightened volatility in its prices is clearly an indication of the growing sensitivity of the flagship digital currency to global economic events amidst its rising mainstream acceptance,” Ryan Lee, Chief Analyst at Bitget Research, said.

“The current reaction underscores how geopolitical tensions and policy decisions are increasingly shaping cryptocurrency market dynamics,” he said.

Agne Linge, Head of Growth at WeFi, an Onchain noncustodial neo-bank, said despite bitcoin’s success year-on-year, it remains susceptible to the broader financial market due to its correlation with Nasdaq-100 and other stock indices.

“The ‘Trump Tariff’ will spark inflation as certain goods will become more expensive. The outlook in the stock market proves growth is threatened,” he said.

Industry players said the Monday mayhem also showed that crypto markets have largely shrugged off Trump’s moves to support the industry.

Bitcoin reacts to global trade uncertainty

Industry players said despite the quick recovery on Tuesday, the cryptocurrency market could be susceptible to heightened volatility in the days to come in view of heightened investor anxiety over a potential global trade war.

Trump agreed to pause the 25 per cent tariffs he imposed on Canada and Mexico for 30 days after phone calls with the Mexican President and Canadian Prime Minister on Monday.

Bitcoin suffered a nosedive after the announcement of massive tariff hikes.

Besides the 25 per cent tariffs on Canada and Mexico, the Trump administration also announced an additional 10 per cent import tax on China.

Global equity markets fell and the dollar surged on Monday as investors rushed to assess how President Donald Trump’s tariffs will affect the US and its biggest trading partners.

Crypto market players said the downturn in the crypto market coincided with heightened investor anxiety over a potential global trade war.

This is despite Trump signing an executive order in January to create a working group tasked with setting clear rules for US crypto firms within six months, along with exploring the creation of a crypto stockpile, they said.

A section of the industry players, however, said despite this short-term turbulence, the trade tensions could ultimately benefit bitcoin as a hedge against inflation and economic instability in the long run.

Shivam Thakral, CEO of BuyUcoin, India’s second-longest-running digital asset exchange, said Tuesday’s significant rebound in the crypto markets is fuelled by positive news surrounding trade negotiations.

“If trade negotiations continue to progress positively, we may see sustained upward momentum in the crypto markets, attracting both institutional and retail investors,” Thakral told Arabian Business.

Sovereign fund sparks crypto frenzy

Along with the pause on tariff hikes on Canada and Mexico, the signing of an executive order by the US President directing the creation of a sovereign wealth fund has also added to frenzied buying in bitcoin and other cryptocurrencies on Tuesday.

The US Treasury and Commerce Departments are set to spearhead the effort.

Though bitcoin was not mentioned at the signing, industry players and investors expect the fund could conceivably house the US government’s bitcoin holdings.

The build-up on bitcoin inclusion in the proposed fund also comes in the backdrop of Trump’s Commerce Secretary nominee Howard Lutnick’s open support for the crypto sector.

His bond trading powerhouse Cantor Fitzgerald is reportedly the custodian for stablecoin giant Tether’s massive holdings of government paper.

Lutnick himself has also reportedly talked about his own personal massive exposure to bitcoin.

Treasury Secretary Scott Bessent, however, has only expressed cautious interest in crypto.