Crypto Markets Rally as Trump Pauses Canada-Mexico Tariffs

In response, Trump has temporarily paused proposed tariffs on both countries for at least 30 days as negotiations continue.

In a Feb. 3 statement on X, Canadian Prime Minister Justin Trudeau confirmed that the 25% tariffs would be put on hold while Canada enhances border security, including appointing a Fentanyl czar and reinforcing its U.S. border presence. 

Similarly, Mexico’s President Claudia Sheinbaum announced that Mexico’s tariffs have also been suspended for a month as the two nations work on security and trade agreements.

Despite Trump later stating that a final decision on tariffs is yet to be made, the crypto market has responded positively. Bitcoin (BTC) surged past $100,000 to $101,731 after dipping to $92,000 the previous day. Ether (ETH) also rebounded from $2,451 to $2,880. The Crypto Fear & Greed Index has risen to 72, shifting into greed territory.

Analysts suggest that market sentiment has improved due to reduced uncertainty. Pav Hundal, lead market analyst at Swyftx, noted that the pause on tariffs has eased investor fears, leading to a full recovery in digital assets. 

He believes Bitcoin could soon reach new all-time highs if the tariff threat continues to fade.

Meanwhile, Sean Dawson, head of research at Derive.xyz, pointed to Trump’s executive order directing the creation of a U.S. sovereign wealth fund as a bullish signal for crypto. 

The appointment of Commerce Secretary nominee Howard Lutnick, a known advocate for digital assets, further strengthens this outlook.

Crypto prices had plummeted on Feb. 3 after Trump initially announced tariffs on China, Mexico, and Canada, with an estimated $10 billion in liquidations. However, Chris Chung, founder of Solana swap platform Titan, believes the market overreacted since digital transactions are not subject to tariffs. He predicts that long-term, tariffs could drive more capital into crypto, especially if inflation rises or fiat currencies weaken against the U.S. dollar.