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Arslan Butt•Tuesday, February 4, 2025•2 min read
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Following President Donald Trump’s temporary suspension of intended tariffs on Canada and Mexico and announcement of the establishment of a U.S. sovereign wealth fund that would possibly include Bitcoin investments, the market for cryptocurrencies staged a spectacular comeback.
Crypto Market Updates
According to Bybit CEO Ben Zhou, the crypto market showed great volatility over the weekend; estimates of liquidations during the initial selloff range in $10 billion. The unrest started with Trump’s first declaration of tariffs on Mexico, Canada, and China, igniting worries about a world trade war.
But as Canada and Mexico struck deals with the United States to improve border security and fight illegal immigration, the market recovered quickly, resulting in a 30-day suspension of the proposed tariffs. After falling to $92,000, Bitcoin recovered to $101,731; Ethereum recovered from its lowest point of $2,451 to $2,880.
Trump Signs Executive Order for a US Sovereign Wealth Fund
Significantly for the cryptocurrency sector, Trump issued an executive order assigning Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick to create an American sovereign wealth fund within the next twelve months. Although Wyoming Senator Cynthia Lummis noted both Bessent and Lutnick’s positive attitude toward cryptocurrencies, she suggested the fund might become a mechanism for government Bitcoin purchases even though specific mention of cryptocurrencies was not addressed.
Bitcoin Bounces Back Above $100,000
BTC/USD
Against other cryptocurrencies, Bitcoin BTC/USD shown amazing endurance in spite of market volatility. Derivatives data indicates low downside risk; the funding rate for Bitcoin futures shows only little influence during the selloff. From 11% to 9%, the annualized futures premium dropped marginally, staying close to the positive level and showing professional traders’ confidence even with the 16.5% drop from Bitcoin’s recent all-time high of $109,354.
Hyperliquid’s Remarkable Growth
Complementing the major events of the day, layer-1 blockchain Hyperliquid has exceeded Ethereum ETH/USD in seven-day revenue, raking in about almost $12.8 million against Ethereum’s $11.5 million. Daily transaction volumes of $470 million resulting from the platform’s performance in perpetual futures trading indicate a significant increase for the network whose HYPE token has risen over 500% since its November release. To support its $25 billion fully diluted valuation (FDV), Hyperliquid still has to develop its smart contract capabilities, according to experts, nevertheless.
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
www.fxleaders.com