Trump's Tariff Delay Eases Investor Worries, Bitcoin (BTC) Leads Crypto Market Higher

In the latest whipsaw of headlines this week, Donald Trump's tariff delay Wednesday eased investor worries with bitcoin BTCUSD leading the crypto market higher.

U.S. President Donald Trump's decision to delay tariffs on auto parts imported from Canada and Mexico has brought some relief to investors, leading to a rise in crypto prices and a rebound in risk assets. The confirmation of the tariff delay came a day after their enactment sparked a selloff in global equities and cryptocurrencies.

Germany's plans to ease debt limits for infrastructure spending and China's move to increase its target deficit for the year also contributed to the rebound in risk markets.

In the latest whipsaw of headlines this week, crypto prices rose again, with bitcoin trading at around $90,000, a 3.7% increase in the past 24 hours. A majority of the assets listed on the broad-market CoinDesk 20 Index showed gains, with bitcoin cash (BCH), Chainlink's LINK, and Aptos' (APT) registering double-digit gains.

The tech-focused Nasdaq and the S&P 500 were trading higher by 1.2% and 1.5%, respectively, in the afternoon session of the U.S. market. Crypto-related stocks also experienced increases from the early week lows.

Crypto exchange Coinbase (COIN) rose by 3.5%, while the largest corporate bitcoin holder, Strategy, saw a nearly 10% gain.

The heightened trade tensions and geopolitical risk have brought investors to the forefront, impacting their sentiment and pressuring risk assets, such as U.S. stocks and digital assets, lower in recent weeks.

Typically, episodes of risk-off sentiment have led investors to seek refuge in the U.S. dollar, which in turn exerts downward pressure on crypto assets, as observed by Joel Kruger, a market strategist at LMAX Group.

However, this time the U.S. dollar index (DXY) experienced a substantial decline to its weakest level since early November, and it is currently trading more than 5% lower than its mid-January peak.

"With Fed rate expectations shifting back to pricing more rate cuts than less in 2025 and with bitcoin capable of shining as a store of value asset, we believe there are plenty of reasons to expect bitcoin to be well supported on dips," Kruger stated.

Crypto analytics firm Swissblock noted that despite the extreme volatility in bitcoin prices over the past few days, their Bitcoin Fundamental Index, which assesses the overall health of the network, showed relatively minor changes.

"Bitcoin's fundamentals are on the verge of shifting into the bullish quadrant, with sustained improvements in liquidity and network growth," Swissblock analysts mentioned in a Telegram broadcast.

They further added, "This strength suggests that BTC is unlikely to be driven into a bear market despite the pessimistic outlooks circulating in the crypto community."

As of the last update on Wednesday, bitcoin was trading at approximately $89,046, demonstrating a 2.56% increase over the past hour and a 3.7% rise over the past 24 hours. At the same time, ether was trading at around $7,083, showing a 0.8% increase over the past hour and a 1.7% rise over the past 24 hours.