Bitcoin Surges 10% to $82,000 as Trump Pauses Tariffs

Bitcoin (BTC) surged to nearly $82,000 early Thursday, sparking gains across the broader cryptocurrency market. This rally was triggered by a significant shift in global trade policy, as President Donald Trump announced a 90-day pause on new tariffs, which had been set to take effect on January 1, 2021. This decision led to a relief rally in broader equity markets on Wednesday, as global leaders and investors breathed a sigh of relief amid mounting recession fears.

Among the major cryptocurrencies, XRP and ether (ETH) led the gains with a 12% surge, while Cardano’s ADA, BNB Chain’s BNB, Solana’s SOL, and dogecoin (DOGE) saw increases of up to 10%. The overall market capitalization rose by 6%, with the broad-based CoinDesk 20 (CD20) index showing a 7% increase. This broad-based rally indicated a strong market response to the positive developments in global trade policy.

The pause on tariffs, which was initially set to take effect on January 1, 2021, was seen as a positive development for the global economy. This decision led to a surge in Bitcoin prices, as the cryptocurrency market responded positively to the news. The pause on tariffs was seen as a sign of potential economic stability, which in turn boosted investor confidence in the cryptocurrency market. The surge in XRP and Dogecoin prices was a clear indication of the market's sensitivity to global economic developments.

In addition to the major cryptocurrencies, midcap tokens also saw significant gains. Bittensor’s TAO, Sonic’s S, and Flare’s FLARE were up as much as 30%, leading the gains among tokens with a market cap below $5 billion. This broad-based rally indicated a strong market response to the positive developments in global trade policy.

The rally in the cryptocurrency market was also supported by short liquidations of over $350 million, the highest since early March. Such liquidation events often present a market buying opportunity, as they can signal an overstretched market that indicates a price correction has occurred. This further eased losses from Monday and Tuesday, as Bitcoin dove to nearly $75,000 at one point.

Traders continue to watch developments for cues on positioning amid the uncertainty. The market is rallying in response to anticipation that most trading partners will negotiate trade deals with the US, avoiding a full-fledged trade war. However, continued tariffs against China and vice versa will lead to a realignment of global trade that could drastically change how the world operates. The industry may not have fully priced in these developments, leaving room for potential growth.

As US regulators continue to streamline regulatory hurdles and implement more favorable policies, it's possible that Bitcoin and other cryptocurrencies have reached a bottom, assuming no unexpected surprises emerge. The start of negotiations with other countries offers some hope, but potential headwinds remain, such as retaliatory tariffs from China in response to Trump's 125% increase. The upswing was fueled by optimism that the worst may be behind us, but the market remains cautious until we see the consequences of this play out over the coming months.