Virtual Currency Market Analysis [February 4]

In response to President Trump announcing tariffs on Mexico, Canada, and China, Bitcoin fell to about9万2千 dollars in the early Monday hours, hitting a low since1月13日. Panic spread and other assets also declined. Ethereum dropped to about2.3k dollars,XRP fell to about2 dollars0.21, and Dogecoin dropped to about dollars before recovering to around 10万2千 dollars. — Cointelegraph

On February 4, in addition to the 25% tariff against Canada and Mexico, a 10% tariff against China was a major factor, but due to market turmoil the tariffs were postponed, and the cryptocurrency market rebounded sharply.

Overall, Bitcoin appears to have a strong rebound with little lasting impact, but in other major coins such as Ethereum and Ripple, prices have not fully recovered, and the declines from last week’s Chinadeep seek have contributed to a gradual slide, including the AI shock.

Some investors who bought during the tariff-driven drops last week and recently are a few to be seen.

Looking ahead, tariffs on China are being discussed, but

·If the US tightens tariffs on China and others, international trade uncertainty will rise. This could trigger a “risk-off” move where investors shift funds from traditional assets (stocks and bonds) to cryptocurrencies like Bitcoin.

·If the value of the US dollar becomes unstable, Bitcoin could play the role of “digital gold” and attract attention as an alternative asset.

·High-performance computer equipment used for Bitcoin mining (such as ASIC miners) is largely manufactured in China. If the US imposes tariffs on imports from China, the cost of mining equipment could rise, potentially hurting the profitability of US-based miners.

·Cryptocurrencies enable cross-border trading with relatively low fees, making them attractive as a means to avoid tariffs and exchange rate risk.

These factors are noted above.

◯ Last week's AI shock (deepseek)

The AI shock that pushed the market down sharply last week has since rebounded quickly. Deep seek involves significant government involvement from China and is modeled on ChatGPT, with concerns that it may be unlawfully using confidential information.

When asked about Bitcoin price forecasts by deep seek, it suggested that by the end of 2025 the price could be between $150,000 and $250,000, indicating concerns about liquidity due to a surge in buying, and recommendations to increase holdings before 2028 halving were noted.

◯ Is cryptocurrency a buying opportunity?

The new tariff policy of President Donald Trump triggered a significant drop in the weekend cryptocurrency market.

Amidst this, Arthur Hayes, co-founder of BitMEX, suggested that conditions might only improve if the Federal Reserve intervenes with liquidity provisions.

Additionally, Hayes advised that “it’s better to be ready to buy cryptocurrencies” as a prescient stance for a coming bull market.

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（This article has been distributed since 2016）