Trump's Tariff Pause Sparks 9.5% S&P 500 Jump, 7% Bitcoin Surge

In an unexpected move, former U.S. President Donald Trump announced a 90-day pause on new tariffs, excluding China but covering all other countries. This decision sparked a wave of relief across global markets, with Trump stating via Truth Social that a 10% “Reciprocal Tariff” would take effect immediately during the pause. However, he warned that tariffs on Chinese goods would rise to 125% once the period ends. This announcement came just a day after fierce new tariffs produced a sharp market breakdown, wiping out trillions in value and causing panic.

The crypto space reacted quickly and positively to the news. Bitcoin shot up over 7%, again crossing the $80,000 level after a temporary slide to $75,000 mid-week. Ethereum and XRP took the altcoins by storm with stunning 12% jumps, while other large tokens such as Solana (SOL), Cardano (ADA), Dogecoin (DOGE), and Binance Coin (BNB) experienced price jumps of up to 10%. Much of the rally was fueled by more than $350 million in short liquidations in crypto futures, which boosted the momentum across the board, increasing the overall crypto market cap by about 6%.

The relief wasn’t confined to cryptocurrency. U.S. equity markets had their best day in more than a decade. The S&P 500 jumped 9.5%, and the Nasdaq jumped 12%—a recovery reminiscent of post-crisis rebounds. Experts point to the policy change as a stopgap measure to soothe financial turmoil and assuage investor fears without letting go of Trump’s negotiation leverage in coming trade negotiations. The action is largely viewed as a tactical measure to prevent an all-out recession or trade war.

Despite the pause, China remains a major outlier. Tariffs targeting Chinese imports are still expected to skyrocket to 125% once the 90-day window ends, raising concerns about a new escalation in U.S.-China trade tensions. Treasury Secretary Scott Bessent claimed the pause was a pre-planned tactic to encourage global negotiations, but many believe the recent market chaos forced the administration’s hand. All eyes are now on China’s response and whether further retaliatory measures are in store.

Jupiter Zheng, head of research at HashKey Capital, believes the crypto market may have already found a local bottom. He points to improving sentiment and signs that the worst of the downturn could be over. Zheng also noted that positive developments in U.S. crypto regulation have likely helped offset broader economic uncertainty. While China’s potential reaction remains a wildcard, continued diplomatic efforts elsewhere could provide further momentum for both crypto and traditional markets.

The recent announcement by former U.S. President Donald Trump to pause reciprocal tariffs has sent a shockwave through global markets, triggering a significant rally in both cryptocurrency and stock markets. This unexpected move has eased some of the pressure that had been building due to ongoing trade tensions, leading to a surge in Bitcoin prices and a recovery in altcoins, including XRP and ETH. The pause in tariffs has been seen as a positive development, reducing fears of an impending global recession and injecting a wave of optimism across various financial sectors.

The cryptocurrency market, in particular, has responded positively to this news. Bitcoin, the leading cryptocurrency, experienced a notable surge, while altcoins like XRP and ETH also saw significant gains. This rally can be attributed to the reduced uncertainty and improved market sentiment following Trump's announcement. Investors, who had been cautious due to the potential economic impact of the tariffs, are now more optimistic about the future, leading to increased investment in digital assets.

The pause in tariffs has also had a broader impact on global markets. Stock markets around the world have shown signs of recovery, with investors regaining confidence in the economic outlook. This optimism has spilled over into the cryptocurrency market, where the surge in prices reflects the renewed interest and investment in digital currencies.

The sudden surge in XRP and ETH prices can be seen as a direct response to the easing of trade tensions. These cryptocurrencies, which have been gaining traction as alternatives to traditional financial systems, have benefited from the improved market sentiment. The rally in these altcoins suggests that investors are looking for opportunities beyond traditional assets, driven by the potential for higher returns and the growing acceptance of digital currencies.

The impact of Trump's tariff pause on the cryptocurrency market highlights the interconnected nature of global financial systems. Changes in trade policies can have far-reaching effects, influencing investor sentiment and market dynamics. The recent rally in XRP and ETH serves as a reminder of the potential for cryptocurrencies to thrive in an environment of reduced uncertainty and improved economic outlook.