Bitcoin’s price gained 7% early Wednesday, trading just below $90,000, as investor optimism grew that punishing U.S. tariffs on Canada and Mexico could be avoided.
At the time of writing, Bitcoin is trading for $89,970.57 after having gained 7.7% in the past day. Meanwhile, Ethereum’s price has recovered 6.1% to send ETH above $2,200, according to CoinGecko data.
Late last night, U.S. Commerce Secretary Howard Lutnick told Fox News on Tuesday that President Donald Trump will “probably” announce a trade compromise with Canada and Mexico as early as today. If that happens, it’ll lessen the blow of what otherwise would have been a new 25% tariff on two of the country’s top trading partners.
“I think he’s going to work something out with them. It’s not going to be a pause. None of that pause stuff. But I think he’s going to figure out, ‘You do more and I’ll meet you in the middle some way,'” Lutnick told Fox News host Larry Kudlow. “Somewhere in the middle will likely be the outcome for the President moving with the Canadians and Mexicans, but not all the way.”
The news arrives after major stock indices, like the S&P 500 and the Dow Jones Industrial Average, posted 1.2% and 1.5% losses on Tuesday. At the same time, Bitcoin slipped below $82,000, completely erasing the gains seen since Trump returned to the White House.
Investors could be forgiven for feeling a sense of déjà vu. It was only last month that the U.S. stalled its punishing tariffs with Canada and Mexico, but still had to mend its fractured trade agreement with China.
The same is true this time around.
In the face of a 20% tariff on Chinese imports, the country has vowed not to back down. “If war is what the U.S. wants, be it a tariff war, a trade war or any other type of war,” Chinese Foreign Ministry Spokesman Lin Jian tweeted.
If war is what the U.S. wants, be it a tariff war, a trade war or any other type of war, we’re ready to fight till the end. https://t.co/crPhO02fFE
— Chinese Embassy in US (@ChineseEmbinUS) March 5, 2025
Trump’s rigidity on tariffs poses a serious threat to traditional and crypto markets, BRN analyst Valentin Fournier wrote in a trading note.
“This aggressive stance risks isolating the U.S. and slowing regional economic growth,” he said Wednesday, adding that, “If sustained, these policies could lead to higher inflation, reduced growth, and tighter liquidity—factors that would weigh heavily on Bitcoin and other digital assets.”
Singapore crypto trading firm QCP Capital characterized crypto markets as “nothing short of a roller coaster,” in its daily markets note. The firm added that as long as macro conditions like trade wars remain viable threats, “crypto remains highly linked to equities, with price action reflecting broader economic shifts.”
The firm said it’s looking ahead to see if any market moving news will come out of Friday’s White House crypto summit, but it’s not overly optimistic.
While it’ll be the first event of its kind, “without any concrete executive orders, funding commitments, or congressional backing in place, the market remains in wait-and-see mode,” QCP wrote, adding that, “Investors view this as an asymmetric event with high stakes. Will it serve as the unexpected catalyst that sends prices soaring, or will it expose crypto’s fragility and trigger a deeper sell-off?”
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Source: https://decrypt.co/308704/bitcoin-climbs-trump-tariff-relief
