"Crypto Surge: Tariff Ease and Institutional Buying Drive Bitcoin, Ethereum Recovery"

Generated by AI AgentCoin World
Tuesday, Feb 4, 2025 1:33 am ET1min read
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The crypto market has witnessed a significant rebound, with Bitcoin and Ethereum regaining lost ground. This surge can be attributed to two primary factors: the easing of tariffs and increased institutional buying.

On February 4, 2025, the crypto market staged a strong comeback after a brutal sell-off triggered by U.S. President Donald Trump's tariff announcement on February 1. Bitcoin (BTC) and Ethereum (ETH), along with the broader digital asset market, suffered heavy losses following the U.S. move to impose tariffs on Canada, Mexico, and China. However, a temporary pause on trade restrictions for Canada and Mexico has since sparked renewed optimism in the market.

BTC, which plunged to a low of $91,200 on February 3, has recovered sharply, trading around $101,000 as of February 4—a 7% gain in the last 24 hours, though still down nearly 2% on a weekly basis. ETH, which suffered an even deeper plunge to $2,460, has bounced back more aggressively, rising nearly 10% in the last 24 hours to $2,800, though it remains 12% lower than a week ago.

The broader crypto market has followed suit, with total market capitalization surging 8.5% in the past day to reach $3.43 trillion, according to CoinGecko. Investor sentiment has also turned positive, as the Crypto Fear & Greed Index has climbed back to 72—indicating a shift into "greed"—after hitting a fear-driven low of 44 during the crash.

The sell-off began on February 3, when Trump's order introduced new tariffs, sending shockwaves across financial markets, including crypto. China was hit with a 10% tariff, while Canada and Mexico faced steeper 25% duties. The move triggered immediate uncertainty, causing risk assets—including cryptocurrencies—to tumble. However, within hours, diplomatic efforts were already in motion.

Canadian Prime Minister Justin Trudeau announced on X that he had spoken with Trump and secured a temporary 30-day pause on the tariffs while both countries worked on a broader border security agreement. The deal includes a $1.3 billion security plan, appointing a Fentanyl cz