Bitcoin, Solana, and other cryptocurrencies rebounded on Monday after U.S. President Donald Trump and Mexican President Claudia Sheinbaum agreed to delay the 25% tariffs that were set to take effect on Tuesday. This decision came after escalating fears over a trade war had sent the crypto markets into a sharp decline. Bitcoin, which had fallen to as low as $92,460 on Sunday, quickly recovered to $101,000 following the tariff pause announcement. Other major cryptocurrencies, including Solana and Ethereum, also saw significant price increases.
Over the weekend, President Trump’s threats of tariffs, which he initially announced on Saturday, rocked the crypto market. These tariffs were reportedly part of a broader strategy to address illegal migration and fentanyl trafficking. In an early Monday post on Truth Social, Trump revealed that he had spoken to Sheinbaum, and the two leaders had agreed to pause the tariffs for one month while negotiations continue.
The news triggered a swift market rebound, with Bitcoin rising nearly $4,000 in just one hour. At its peak, the cryptocurrency reached $101,950 before settling back around $101,200. Solana also saw an uptick, reaching $207, and Ethereum climbed back toward $2,500. XRP, which had dropped from above $3 to $2.01, surged by over 12% to $2.62 as the news of the tariff delay spread.
Despite the positive market response, analysts remain cautious. Bernstein noted that while tariffs could lead to a stronger dollar and higher inflation, making cryptocurrencies less attractive in the short term, Bitcoin has shown long-term value as a hedge against monetary debasement. The analysts pointed out that Bitcoin and other cryptocurrencies often follow risk assets in the short term, but their long-term value proposition remains intact.
The rebound also came after widespread liquidations across the crypto market. Ethereum, in particular, had seen an 18% drop, contributing to a significant portion of the $2.3 billion in liquidations. However, with the announcement of the tariff pause, some of the hardest-hit tokens regained ground.
The pause is set to last for one month, with U.S. officials like Secretary of State Marco Rubio and Treasury Secretary Scott Bessent leading negotiations. Following the Mexico update, Trump also delayed tariffs on Canadian imports for 30 days. Canadian Prime Minister Justin Trudeau confirmed the development in a post on X, stating that he had a "good call" with Trump. Markets are cautiously optimistic about the short-term recovery, with many crypto-related stocks, including Exodus Movement and Iris Energy, seeing gains.
While the situation remains fluid, the temporary halt to the tariffs has provided a brief reprieve for the cryptocurrency market, which has been facing significant volatility.
