Cryptocurrencies and related stocks soared on Wednesday after President Donald Trump announced a 90-day pause for most countries caught up in his sweeping tariff policy.
The upswing is an abrupt change for the crypto space as a whole, which has suffered major declines over the last few weeks amid tariff turmoil. Coinbase shares tumbled 15% in the days following Trump’s “Liberation Day” announcement of levies on nearly all U.S. trading partners. Bitcoin, Ethereum and XRP were all down 10%, 20% and 22% respectively.
But hours after Trump’s tariffs took effect on Wednesday, the president posted on his social media platform Truth Social that he had authorized a 90-day pause on some tariffs and “a substantially lowered reciprocal tariff during this period of 10%.” China, however, is the exception, and Trump announced new tariffs on the country that increased overall levies on products from that country to 125%.
That single post sent stocks in the traditional markets soaring. Galaxy Digital is up 18% in the hours since Trump’s reversal, as investors breathe a sigh of relief. Bitcoin mining companies Riot Platforms and Mara Holdings are also up since the reversal. And cryptocurrencies Bitcoin, Ethereum and XRP all increased by 5%, 9% and 9%, respectively.
Tariffs have had no direct impact on cryptocurrencies and crypto companies, but these assets were dragged down by a general risk-off sentiment from investors who see them as highly volatile. The economic uncertainty caused investors to flee risky assets in an attempt to brace themselves for the impacts of a brewing trade war.
“This environment is very much a macro-driven environment,” John Tadaro, an analyst at investment bank Needham & Company, told Fortune. “In the last two weeks, Coinbase and other companies I cover are trading mostly based on tariffs, expectations for fiscal policy, and a general either risk off or risk on sentiment.”
While crypto had been particularly hit hard by tariff fears, the uncertainty around high levies imposed by the U.S. on other countries has reverberated throughout the entire financial system.
The high tariffs are expected to drive up the price of goods by disrupting global supply chains, and increasing inflation. On Wednesday, fears of “serious liquidity issues” added to the strain on financial markets, pushing investors and economists to raise the alarm about possible disastrous consequences for the U.S. economy.