Bitcoin Surges 10% to $85,000 as Trump Exempts Tech Products from Tariffs

The crypto market, led by Bitcoin, experienced a notable rebound following U.S. President Donald Trump's decision to exempt key tech products from tariffs imposed on China. This move was seen as a positive development amidst the ongoing trade war, as it provided relief to the tech sector which had been preparing for increased costs and potential disruptions in supply chains. The exemption included critical items such as smartphones, computers, and chips, which are essential for major tech companies.

Bitcoin's price surged past $85,000 following the announcement, with other altcoins also recording significant gains. This rally in crypto prices was largely in sync with the broader market, which had been rallying since the news of the tariff exemptions. The correlation between the crypto market and broader risk-driven markets highlighted the interconnected nature of global financial markets and the impact of geopolitical events on investor sentiment.

The decision to exempt tech products from tariffs was part of a broader strategy by the Trump administration to mitigate the economic impact of the ongoing trade war with China. By pausing tariffs for 90 days in all countries except China, Trump aimed to create a window for negotiations and potentially ease tensions. This gesture of goodwill was seen as a positive step towards resolving the trade dispute, which had been a significant source of uncertainty for global markets.

Moreover, this move could also mark the beginning of the end of the ongoing trade war between the US and China. China had announced a 125% tariff on US imports following the latter’s decision to impose 145% tariffs on Chinese goods. Trump had mentioned that he is looking forward to making a deal with China, which is also positive for the market. Bitcoin and altcoins could witness another massive rally once that happens.

In addition, the exemption of tech products from tariffs had implications for the broader economy. The tech sector is a major contributor to economic growth and innovation, and the relief from tariffs allowed companies to focus on research and development rather than navigating complex trade policies. This could lead to increased investment in technology and potentially drive long-term economic growth.

Crypto analyst Kevin Capital suggested that the correctional phase could soon be over for the crypto market. He noted that this phase has so far gone according to plan. However, he warned that there is still a lot of work to be done. The analyst believes it is important for the Bitcoin price to clear the $89,000 level before market participants start feeling good. He added that the macro side also needs to line up for things to start looking really good for the market. The macro side looks to be progressing well as the Federal Reserve recently revealed plans to provide liquidity if necessary. Meanwhile, the latest CPI and PPI inflation data came in lower than expectations, which could also motivate the Fed to start easing monetary policies.