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Expert Analysis: How will the SEC’s next move shape XRP’s future? Read more here.
Bitcoin Rebounds from $91K on US Tariff Developments
While markets await clarity on the SEC’s appeal plans, bitcoin (BTC) advanced on US tariff-related developments. On Monday, February 3, President Trump announced a temporary pause to 25% tariffs for Mexican and Canadian goods.
Mexico agreed to send 10,000 Mexican troops to the Mexico-US border to stop fentanyl trafficking and illegal immigration. Trump stated he would suspend tariffs for one month to allow negotiators to reach a trade deal.
Meanwhile, Justin Trudeau, the Canadian Prime Minister, announced a $1.3 billion border plan to reinforce its US border and combat fentanyl smuggling.
The abrupt decision to halt tariff plans boosted demand for riskier assets. However, uncertainty remains as China faces 10% tariffs starting February 4 at 05:01 GMT, unless a last-minute deal is reached.
US BTC-spot ETF Market May End Four-Day Inflow Streak
The US BTC-spot ETF market highlighted investor sensitivity to policy shifts. While Mexico and Canada avoided new tariffs, potential levies on China remain a risk factor. According to Farside Investors, flow trends for February 3 included:
- Fidelity Wise Origin Bitcoin Fund (FBTC) had net outflows of $177.6 million.
- ARK 21Shares Bitcoin ETF (ARKB) saw net outflows of $50.7 million.
- Bitwise Bitcoin ETF (BITB) and VanEck Bitcoin ETF (HODL) also reported net outflows.
Excluding BlackRock’s (BLK) iShares Bitcoin Trust (IBIT), the US BTC-spot ETF market saw total net outflows of $234.4 million.
Investors also await further updates on a potential US Strategic Bitcoin Reserve (SBR).
Trump Administration Eyes Bitcoin Reserve Plan
On February 3, Tim Kotzman, founder of Bitcoin Treasuries, shared news of David Sacks, Trump’s AI and Crypto Czar, holding a press conference on February 4. The White House schedule indicates the conference will address the administration’s plans to secure the US as a leader in the digital asset ecosystem.
Sacks may give an update on Trump’s crypto Executive Order (EO), which tasked a Presidential Working Group in Digital Asset Markets with evaluating the creation of a strategic national digital assets stockpile. There may also be updates on Senator Cynthia Lummis’ Bitcoin Act.
Senator Cynthia Lummis, Chair of the Senate Banking Subcommittee on Digital Assets, introduced the Bitcoin Act in late 2024. Senator Lummis proposed the US government acquire one million BTC over five years, with a mandatory holding period of 20 years.
Congress, the Federal Reserve, the Treasury Department, and the President must approve a strategic reserve asset.
Bitcoin Price Outlook
On Monday, February 3, BTC advanced by 3.78%, reversing Sunday’s 3.13% loss, closing at $101,580. Significantly, BTC tumbled to a session low of $91,282 before rebounding on US tariff developments.
BTC’s near-term price trend hinges on several factors, including Trump’s crypto and trade policies, the Fed rate path, and US BTC-spot ETF flows.
- Bearish scenario: Rising trade tensions, a hawkish Fed, and stalled SBR discussions could drag BTC below $90k.
- Bullish scenario: De-escalating trade risks, a less aggressive Fed, and increasing political support for an SBR could drive BTC toward its all-time high of $109,312.
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