(Bloomberg) — Bitcoin surged and most smaller cryptocurrencies gained even more after President Donald Trump surprised markets by saying he would pause so-called reciprocal tariffs on dozens of non-retaliating countries.
The largest digital asset jumped as much as 7.4% to $82,715 after beginning Wednesday in the red, while XRP and Solana each increased more than 11%. Ether, the second-biggest token, also turned higher after Trump noted the change on his social media platform.
The about-face by Trump signaled a tentative reprieve in trade hostilities that has wiped out trillions from global markets and ignited fears of a US recession.
“Crazy!” said Zaheer Ebtikar, founder of crypto fund Split Capital, “The administration every single day for the past two weeks has been adamant about the tariffs. But now the president changing his stance on tariffs so quickly shows that there’s definitely flexibility. The market will adapt to the new environment.”
“Broadly speaking what it means for Bitcoin,” Ebtikar said. Is that it has “traded like a risk asset. People are willing to get more risk on — that’s what the market is signaling.”
Unlike companies in major US equity indexes, digital tokens like Bitcoin had not been impacted materially by the tariffs, and had shown resilience due to moderate leverage and crypto-friendly US regulations. Even so, Bitcoin had dropped about 30% from its all-time high reached in January.
“The market was oversold, with funding persistently negative,” said Edward Chin, co-founder of Parataxis. “Risk was clearly to the upside and the market just needed a catalyst to move meaningfully higher.”
Cryptocurrencies had been among few asset classes to hold steady, as investors kept dumping stocks and bonds and seeking havens to the turmoil. Bitcoin’s relative outperformance buttresses the argument that it should be included in portfolios to hedge against risks, said Joel Kruger, market strategist at LMAX Group.
“Investors are increasingly waking up to Bitcoin’s underlying value proposition, particularly its allure as a hedge during times of global market turbulence,” he said.
–With assistance from Suvashree Ghosh, Sidhartha Shukla and Emily Nicolle.
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