Talk about a rollercoaster. After a brutal Friday that saw the crypto market plunge following President Donald Trump’s surprise announcement of 100% tariffs on China, digital assets are finally getting a breather. The reason? The same one that caused the crash: Trump himself.
On Monday, the U.S. dollar was steadily climbing against other major currencies as global investors breathed a sigh of relief. The sentiment across financial markets is that the latest trade war escalation with China might already be on the way to being tempered. This cautious optimism is exactly what the crypto market needed.
That massive sell-off on Friday, which hit stocks and cryptocurrencies alike, was a direct response to the renewed tariff broadside. But by Sunday, the tone had drastically changed.
“Certainly it’s pretty nervous out there,” said Tim Kelleher, head of institutional FX Sales at Commonwealth Bank in Auckland.
“If you look at the U.S. and China stuff, it looks like Trump has done a bit of a TACO again and softened his tone,” he added, referring to a trading adage that “Trump always chickens out.”
The President took to Truth Social to smooth things over, posting: “Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment… The U.S.A. wants to help China, not hurt it!!!”
The crypto market, which had been fluctuating between gains and losses over the weekend, ended up slightly in the green on Monday, with Bitcoin last trading up 0.2% at $115,313.
While the gains are modest, the recovery in BTC from its weekend lows — and the overall stability in global markets — is critical. Analysts warn that trade threats like these often trigger sharp volatility and the “unwind of carry trades” in traditional finance, which creates ripple effects that inevitably splash into the crypto pool. For now, however, the President’s softening rhetoric seems to have put a lid on the geopolitical panic, allowing the crypto sector to focus on its own, albeit fragile, rebound.
