It has been less than two weeks since Donald J. Trump stepped back into the White House, and he has already rattled the cages with numerous controversial decisions. The latest came on Saturday evening as he levied hefty taxes on China but also its two neighbors – Canada and Mexico.
Given the fact that his actions came during the weekend when only one financial market was open for trading, it was expected that this particular market would face the music.
Bitcoin Slumps During the Weekend
Trump’s 25% tariffs on Canada didn’t go unnoticed, and the latter’s Prime Minister, Justin Trudeau, responded kindly by imposing the same tax on American goods. Following Trump’s justification, claiming that these taxes aim to protect American citizens, as well as reducing the flow of drugs and undocumented immigrants into the US, Trudeau had this to say:
“We don’t want to be here; we didn’t ask for this.” However, he added that his country would “not back down” and that their retaliation was a sign that they would be “standing up for Canadians.”
With Mexico preparing its response and China said to challenge Trump’s tariffs at the World Trade Organization, the situation seems far from reaching a peak, and there’s no de-escalation in sight. Moreover, the US president has a clause in the order he signed that allows him to impose even bigger taxes should the aforementioned nations retaliate, as they seem to be doing.
The political landscape worsened during the weekend as Trump’s orders were signed on Saturday, and the only opened financial market received the biggest blow. Being a 24/7 tradable asset, BTC’s price slumped from over $106,000 on Friday to under $98,500 earlier today.
Gold Hits ATH
On the surface, gold’s price actions in the past several days seem to contrast with those of BTC. After all, the precious metal shot up to a fresh all-time high of almost $2,820/oz on Friday. However, the bullion also retraced after its new peak and closed Friday (and January) at just under $2,800.
Moreover, gold, just like stocks and all other non-crypto financial markets, is closed for trading during the weekend, so the impact on it is yet to be seen. The futures markets offer little insight as of press time, so when the Asian trading session opens on Monday morning, it will reveal the true picture behind Trump’s actions.
At the same time, the impact on crypto and BTC could also worsen if a bigger sell-off transpires in the next few days.
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