- Some Chinese firms make technology that is used in Bitcoin-mining computers
Bitcoin has surged past $80,000 after President Donald Trump declared a 90-day pause on ‘reciprocal’ US tariffs.
Having dipped to around $75,000 yesterday afternoon, the cryptocurrency has since climbed to $81,669.1 following Trump’s latest tariff announcement on Wednesday.
New levies on American goods imports from dozens of countries, such as India, South Africa and Vietnam, came into effect yesterday before Trump suspended them just hours later for 90 days.
However, the US Government hiked tariffs on Chinese-made goods to a massive 125 per cent after Beijing retaliated to earlier increases with an 84 per cent levy.
China is home to many manufacturers whose technology is used in computers that mine Bitcoin, a process whose cost could increase significantly due to the tariffs.
The trade war has also driven more people to purchase Bitcoin, believing it is a hedge against heightened economic and geopolitical uncertainty.
Soaring: Bitcoin has surged past $80,000 in the wake of President Donald Trump declaring a 90-day pause on ‘reciprocal’ tariffs
Bitcoin’s proponents often say the currency’s supply cap of 21 million coins and decentralised nature can help protect an individual’s wealth against inflation.
Simon Peters, a crypto analyst at eToro, noted that more customers on the platform have been buying crypto since Trump’s ‘Liberation Day’ speech.
He said: ‘Crypto markets have been holding up relatively well post ‘Liberation Day.’ Historically, crypto markets have been susceptible to big drawdowns in uncertain conditions.’
Peters added that loosening financial conditions, including a weaker US dollar and interest rate cuts by the Federal Reserve, ‘could lead the way for the next upwards move and fresh all-time highs’.
Bitcoin still remains far below its record price of $108,099 on 20 January, which followed investor excitement about Trump’s re-election.
During his presidential campaign, Trump told a conference in Nashville, Tennessee, that he would turn the country into the ‘crypto capital of the planet’ and create a Bitcoin ‘strategic reserve’.
He also pledged to fire Gary Gensler, the chairman of the Securities and Exchange Commission (SEC) and a prominent critic of the cryptocurrency industry.
Just after Trump retook office, Gensler’s successor – Mark Uyeda – launched a crypto task force to create a regulatory framework for crypto assets.
And last week, the SEC announced it would review several historical employee statements on crypto regulations.
‘The purpose of this review is to identify staff statements that should be modified or rescinded consistent with current agency priorities,’ the organisation said.
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