Bitcoin trimmed earlier losses, topping $100,000 as the risk move improved, after the U.S. agreed to pause tariffs on goods from Mexico for one month.
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“Bitcoin holding up better than the rest of the market reinforces its position as the safest bet in crypto,” said Ben Kurland, CEO at crypto research platform DYOR. “When panic sets in, liquidity flows to bitcoin over riskier assets, proving once again that it’s the industry’s reserve asset.”
On Monday Trump also signed an executive order outlining plans for a government-run sovereign wealth fund that would serve as an economic development tool. Though the order didn’t mention bitcoin, crypto enthusiasts are speculating that it would be the kind of fund that could house the government’s confiscated cryptocurrency holdings.
Cryptocurrencies tumbled over the weekend after Trump signed an order imposing 25% tariffs on imports from Mexico and Canada, as well as a 10% duty on China. The U.S. does about $1.6 trillion in business with the three countries.
Bitcoin has saw $377.6 million in long liquidations in a 24 hour period, according to CoinGlass. Ether saw $479 million in long liquidations in the same period.
Other coins saw deeper cuts but also traded off their session lows. Ether was last down by about 7% at $2,760.88, after trading above $3,300 Friday. Meme coins were among the hardest hit.
Jeff Park, Bitwise Asset Management’s head of alpha strategies, said a sustained tariff war would be “amazing” for bitcoin in the long-run due to an eventual weakening of the dollar and U.S. rates.
While many believe bitcoin is a hedge against inflation and uncertainty over the long term, it trades like a risk asset in the short term — and could endure further pain this month due to uncertainty around the trade war triggered by Trump’s tariffs.
“Digital assets will eventually like today’s [U.S. Treasury] yield mix (higher break-evens and lower real yields) but it will take outright nominal yields to roll lower at some stage (on growth fears) to solidify that,” Geoff Kendrick, an analyst at Standard Chartered, said in a note Monday. “Until then we may be in for a choppy few days where the $90,000 level in BTC is again at risk.”
Investors are watching $90,000 as the key support level in bitcoin, and some have warned of an even deeper pullback toward $80,000 should the cryptocurrency meaningfully break below its support.
—CNBC’s Michael Bloom contributed reporting
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