For the crypto market, this is an unstable Spring Festival: Trump started a tariff war, causing the crypto market to plummet; Deepseek released, and the market reacted violently; El Salvador canceled Bitcoin’s official currency status; the Federal Reserve continued to maintain its decision not to cut interest rates…

The Spring Festival was a turbulent time for the crypto market: Trump’s tariff war, which led to a significant decline in the crypto market; the launch of Deepseek, sparking strong market reactions; El Salvador revoking Bitcoin’s official currency status; and the Federal Reserve’s decision to keep interest rates unchanged…

Golden Finance has put together the top 10 crypto news stories from the Spring Festival, helping you revisit this unforgettable holiday.

1. Trump’s Tariff War

Trump vs Canada and Mexico

On January 31, White House spokesperson Caroline Levitt confirmed that starting February 1, the U.S. would impose a 25% tariff on goods from Mexico and Canada. The announcement followed President Trump’s statement on January 30, where he confirmed his commitment to a 25% tariff on imports from these countries starting February 1.

Trump also posted on the “Truth Social” platform that if Canada became the 51st state of the U.S., it would be “exempt from tariffs!” He wrote: “Therefore, Canada should become our beloved 51st state. The Canadian people will benefit from much lower taxes, better military protection, and — no tariffs!”

In response, Canadian Prime Minister Justin Trudeau stated that Canada would impose a 25% tariff on $155 billion CAD worth of U.S. goods. This includes immediate tariffs on $30 billion CAD worth of U.S. goods starting Tuesday, with additional tariffs on $125 billion CAD of U.S. products to follow in 21 days.

Trump vs. China

At around 8 PM ET on February 1, the White House announced a 10% tariff on Chinese imports, citing issues such as fentanyl.

China strongly expressed its dissatisfaction and resolute opposition. The U.S.’s unilateral tariff actions severely violated World Trade Organization (WTO) rules, which not only failed to solve its own problems but also undermined normal economic and trade cooperation between China and the U.S. In response, China will file a lawsuit with the WTO and take corresponding countermeasures to firmly protect its rights.

On February 4, the State Council Tariff Commission issued an announcement stating that, with the approval of the State Council, starting February 10, 2025, additional tariffs would be imposed on certain imports from the U.S. These include a 15% tariff on coal and liquefied natural gas, and a 10% tariff on crude oil, agricultural machinery, large-displacement cars, and pickup trucks.

Trump vs EU

On February 2, local time, U.S. President Trump stated that he would “definitely” impose new tariffs on the European Union. He again complained about the U.S. trade deficit with the EU and claimed that the EU was not importing enough U.S. cars and agricultural products. Trump did not specify the tariff levels or timeline. “I won’t say there’s a timeline, but it will happen soon,” he told the media.

In response, the EU said that if the U.S. imposed tariffs on the EU, the EU would “respond resolutely,” marking the latest expression of dissatisfaction with President Trump’s trade policies, which are spreading globally. The use of tariffs “is harmful to all parties,” and the EU expressed regret over Trump’s decision to impose tariffs on Canada, Mexico, and China.

In addition, Trump stated that the U.S. would impose tariffs on imports such as computer chips, pharmaceuticals, steel, aluminum, copper, oil, and natural gas as early as mid-February.

However, on February 3, Trump temporarily dropped the tariff hammer.

After speaking with President Trump, Canadian Prime Minister Trudeau announced that the U.S. would suspend tariffs on Canada for at least 30 days. Earlier on February 3, Trump also spoke with Mexican President Obrador. After their conversation, both leaders agreed to delay the tariff measures for one month and continue negotiations.

2.“Tariff War” Shocks the Market

After the U.S. announced that it would impose a 25% tariff on goods from Canada and Mexico, the U.S. Dollar Index (DXY) rebounded by as much as 69 points from its daily low, reaching 108.48. The USD/CAD pair erased earlier losses and turned positive. Spot gold dropped to as low as $2795.34 per ounce, while Bitcoin fell below $103,000 per coin, down 1.67% on the day. Both U.S. and Brent crude oil prices narrowed their losses, closing near flat at $72.89 per barrel and $77.02 per barrel, respectively.

Following this, the crypto market continued to fall, with Bitcoin (BTC) hitting a low of around $92,876.12 on February 3, the lowest point in over two weeks, down 12.29% from $105,893 on January 30. Ethereum (ETH) saw even worse performance, dropping to $2,460.55, nearly $1,000 lower than $3,422 on February 1, marking a 28.10% drop.

The sell-off in altcoins was even more severe, with DOGE hitting a new low of $0.2237, down 34% from $0.3398 on January 1. Other altcoins like XRP, ADA, AVAX, and LINK all dropped more than 10%.

Financial markets in Japan and South Korea were also hit hard. On February 3, the KOSPI index in South Korea closed down 64.04 points, a 2.54% drop, ending at 2,453.33 points. The Nikkei 225 index in Japan closed down 1,052.40 points, a 2.66% drop, at 38,520.09 points. Due to the U.S. tariff decision, Japan’s bond market saw the 10-year government bond yield rise to 1.260%, the highest since April 2011.

Many institutions and industry experts have shared their opinions:

Former U.S. Treasury Secretary Larry Summers stated that Trump’s tariff policy defies economic logic. He argued that it would raise consumer prices and significantly increase costs for U.S. producers. Summers questioned, “Why, out of all countries, are we choosing to wage an economic war against Canada? Canada’s minimum wage and basic pay are higher, and its unions provide more protection for workers than in the U.S. I just don’t understand the logic behind these policies. This is clearly a regressive tax on American consumers.”

Citigroup noted that they expect further tariff escalation to lead to higher gold prices in the next 6-12 months, forecasting gold to rise to $3,000 per ounce. They also expect silver to increase to $36 per ounce, while predicting copper prices will fall to $8,500 per ton in the next three months.

J.P. Morgan expressed a bearish short-term outlook for base metals due to U.S. tariff policies while reinforcing their bullish stance on gold. They predicted that base metal prices at the London Metal Exchange (LME) might face significant downward pressure due to concerns over economic growth, macro risks fading, and a stronger dollar.

J.P. Morgan analysts Eric Beinstein and Nathaniel Rosenbaum stated that unless high tariffs are imposed on the EU, or economic conditions force the Federal Reserve to raise interest rates, Trump’s proposed tariffs are unlikely to have a significant impact on investment-grade credit risk or spreads.

Robert Kiyosaki, author of Rich Dad Poor Dad, tweeted that with Trump’s new tariffs coming into effect, gold, silver, and Bitcoin may crash, but the price drops will create more buying opportunities. The real issue, however, is the debt, which will only worsen.

BTC Markets CEO Caroline Bowler commented, “Trump’s tariff policies are affecting the entire market. Concerns about a trade war and stagflation triggering a recession are now spreading to both the altcoin and Bitcoin markets.”

Bitwise Alpha Strategy Officer Jeff Park stated that while tariffs may be just a temporary tool, the long-term outcome is that Bitcoin will not only rise, but it will do so faster, as both sides of the trade imbalance equation want Bitcoin. Therefore, the end result will be the same: higher prices and faster growth.

Petr Kozyakov, CEO of the crypto payment platform Mercuryo, pointed out that after Trump’s tariff announcement on Friday, the crypto market was hit with a wave of FUD, and the expectation of long-term interest rate hikes shook global markets. While Bitcoin dropped below $100,000, the cryptocurrency king has once again proven its uniqueness, standing out from the altcoins, which saw declines across the board. Bitcoin plummeted to just above $91,000 overnight, a near 10% drop, before rebounding to around $95,000. Other major cryptocurrencies saw even larger declines, with Ethereum down about 20%, while Solana fared relatively better, falling just 6%.

3. DeepSeek Launch Shakes the Tech and Crypto Markets

On January 27, Deepseek became the top app on the U.S. Apple App Store, overtaking ChatGPT. With its low-cost strategy of ¥0.1 per million tokens and exceptional performance, Deepseek quickly caught the attention of tech giants like Meta.

Later that day, Deepseek triggered a massive sell-off in AI stocks, causing European and American tech companies to lose a combined market value of $1.2 trillion. Semiconductor stocks and the entire industry chain serving AI and data centers saw sharp declines. Nvidia’s stock, for example, dropped by 16.97%, losing $592.658 billion in market value in just one trading day—the largest single-day loss in U.S. stock market history.

Deepseek’s competitive AI model raised concerns about its potential to challenge the U.S.’s technological dominance, resulting in significant drops in Japanese chip stocks. Advantest, a supplier to Nvidia, fell by 8.2%, Disco Corp by 2.9%, SoftBank by 5.4%, and data center cable manufacturers like Furukawa Electric and Fujikura Ltd saw their stocks fall more than 8%. Experts noted that the large investments in AI by big tech companies may not yield the expected returns, and Deepseek could be the catalyst for a correction in tech stocks.

The crypto market also reacted strongly.

According to GMGN data, on January 27, Deepseek’s meme coin, SEEK, had a market value of $40 million, priced at $0.0376 USDT, with a 70% rise within the hour. On January 28, the AI project based on Deepseek, VVV, surged above $17, with a 24-hour gain of 103.7%.

Other tokens, especially AI-related ones, were not so lucky. The total market value of AI-related cryptocurrencies dropped 10%, from $47.54 billion on January 26 to $42.50 billion. Trading volume surged by over 42% within 24 hours, reaching $3.55 billion, which intensified the selling pressure. The broader crypto market also faced a downturn, leading to a wave of leveraged liquidations. Leverage allows traders to borrow funds to increase their positions, amplifying both potential profits and losses. In the past 24 hours, nearly $860 million worth of liquidations took place, with $794 million in long positions being liquidated. Bitcoin long positions worth $260 million were liquidated.

President Trump remarked at a Republican meeting in Miami that the rise of China’s AI startup Deepseek should serve as a “wake-up call” for American companies, urging them to focus on competition to stay ahead.

Nvidia (NVDA.O) called Deepseek an “outstanding AI advancement,” with a spokesperson commenting that Deepseek demonstrated how new models can be created using widely available models and limited computing resources.

Ejaaz Ahamadeen, a former global digital asset architect at ConsenSys, wrote on X, “Deepseek has just accelerated everything. We used to think it would take $100 billion to build these products, and they’d be closed-source, leading to monopolies. But Deepseek surpassed all the leading models at a fraction of the cost and open-sourced the technology. Now, any AI builder can access the most powerful model. Why isn’t anyone talking about how we’ll see ‘better agents’? The theory of fat apps is becoming more real. This is fantastic for open-source AI.”

The founder of Black Myth: Wukong called Deepseek potentially a national-level technological achievement.

Shaw, the founder of ai16z, commented on Deepseek and other large models, noting that AI is undergoing an open-source revolution, with labs like Google, OpenAI, Claude, and now Deepseek, continually breaking new ground in benchmarks and capabilities. Shaw emphasized that open-source models like Deepseek are a major win for the industry because they enable developers to scale AI applications to millions of users at a lower cost. As AI models become more commercialized, this technology is moving toward being free, open-source, and running on personal computers at zero cost.

Nirgunan Tiruchelvam, Head of Consumer and Internet at Aletheia Capital, stated that Deepseek’s product challenges the belief that Silicon Valley’s massive capital investments are the best way to handle the AI trend. It makes people question the enormous resources allocated to AI.

Jack Clark, co-founder of Anthropic, said that Deepseek’s progress challenges the assumption that the West holds a significant lead in AI.

4. Crypto Tsar David May Transform the Crypto Industry

Recently, “Crypto Tsar” David Sacks has been very active, making many positive remarks about the future of the crypto industry:

On February 5, during a press conference at 3:30 AM Beijing time, David Sacks reaffirmed his goals, including establishing a “clear regulatory framework for crypto,” “ensuring crypto innovation happens on U.S. soil,” and “ushering in the golden age of digital assets.” However, no new details were provided.

Sacks also mentioned that he is exploring the feasibility of Bitcoin reserves. He considers NFTs and Memecoins to be “collectibles” rather than securities or commodities. This distinction matters because collectibles are taxed differently from securities and commodities.

In a Fox News interview, when asked when the U.S. would announce a strategic Bitcoin reserve, Sacks responded: “Trump has asked us to explore this, and it’s one of the issues we’re currently examining.” He also praised President Donald Trump’s executive order on cryptocurrencies, which aims to clarify regulations, define digital assets, and strengthen the U.S. dollar’s dominance through stablecoins. According to Sacks, the newly established Digital Asset Working Group will oversee regulatory developments, categorizing digital assets into groups like securities, commodities, and collectibles. The government is also focused on expanding the use of stablecoins, seeing them as a way to increase demand for U.S. Treasury bonds. Sacks believes this strategy could help support Treasury bonds and reduce long-term interest rates.

5. El Salvador Reverses Bitcoin’s Status as Official Currency

On February 2, the Salvadoran Congress, controlled by the ruling party, quietly passed a reform to the Bitcoin Law, effectively nullifying Bitcoin’s status as legal tender and making its use optional for users. This change came after nearly two years of pressure from the International Monetary Fund (IMF), which had set the condition of “reducing Bitcoin’s risks” in exchange for President Nayib Bukele’s approval of a crucial $1.4 billion loan. To receive this loan, the Salvadoran government was required to amend the law by the end of January. The Bitcoin law had been in place for over three years, and the reform made changes to six clauses, removing three of the sixteen original provisions. Going forward, Bitcoin will no longer be considered “currency,” its use will be voluntary, and it will no longer be used for tax payments.

As of February 3, El Salvador holds 6,056.18 BTC, worth approximately $586 million USD.

6. Trump Signs Executive Order to Create U.S. Sovereign Wealth Fund

On February 3, U.S. President Trump signed an executive order to establish a U.S. sovereign wealth fund. According to the White House, the order directs the U.S. Treasury Department and the Department of Commerce to begin reviewing the process of setting up the fund.

U.S. Treasury Secretary Mnuchin explained, “We will kick off this process in the next 12 months. We aim to monetize assets on the U.S. balance sheet for the benefit of the American people.” He added that they would look into the “best practices” of other sovereign wealth funds, and the fund will hold a variety of liquid assets and other U.S. assets. Trump had frequently discussed this idea during his campaign, advocating for a fund that would “invest in great national causes for the benefit of all Americans,” such as infrastructure development and medical research.

It remains unclear where the funding for the U.S. sovereign wealth fund will come from. Most sovereign wealth funds are financed by surplus revenue from natural resources, like the oil-rich countries of the Middle East. However, the U.S. faces significant budget and trade deficits. On the other hand, the U.S. also has a robust private market, which allows investors to support the diverse projects that Trump has proposed for this new fund.

Trump also suggested that the fund might be used to acquire TikTok. After signing the executive order, Trump commented, “We will use it for certain things, possibly acquiring TikTok, maybe not… If we get the right deal, we’ll do it, if not, we won’t… We may include this deal in the sovereign wealth fund or collaborate with very wealthy people.”

Bitcoin advocate and U.S. Senator Cynthia Lummis responded to the news by posting on X, saying, “This is a big deal,” and included the Bitcoin symbol, which excited cryptocurrency enthusiasts. While the structure and funding of the U.S. sovereign wealth fund remain unclear, The New York Times and Financial Times reported that the Biden administration had considered creating such a fund before Trump’s election.

Flexa CEO Danny McCabe noted, “Given the U.S.’s strong support for digital assets, the sovereign wealth fund is likely to include Bitcoin, and potentially other ‘Made in America’ digital assets with real economic value, such as Ethereum. Incorporating these digital assets would not only increase stability for the U.S. economy but also help position America as a leader in the digital assets sector.”

Omni Network co-founder Austin King suggested that Trump’s establishment of a sovereign wealth fund could be a way to acquire Bitcoin without the interference of bureaucracy.

7. Federal Reserve Decision: No Rate Cut

On January 30, the U.S. Federal Reserve announced that it would keep the federal funds rate unchanged between 4.25% and 4.5%, and continue its planned balance sheet reduction. This decision aligned with market expectations.

On February 4, Federal Reserve Governor Collins stated that the Fed should remain patient and cautious with its policy, as there’s no immediate need for a rate adjustment. There’s no urgency for a further rate cut at the moment, and the Fed intends to proceed with patience. In the future, we expect the rates to gradually normalize.

Trump stated that the Fed’s decision to hold rates steady last week “was the right choice given the current circumstances.”

Fed Governor Bostic said: “We’re ready to stay on hold for some time before considering any rate cuts.”

Morgan Stanley economists now expect that the Fed will not cut rates in March and predict a rate cut in June instead. The Trump administration’s rapid tariff actions are faster than expected, which may result in inflation remaining at higher levels, making any near-term rate cut unlikely.

Galaxy Securities issued a report stating that, based on the performance of the U.S. economy at the end of 2024 and the current economic data, the U.S. economy shows some signs of growth and resilience. Since Trump took office on January 20, he has quickly signed a series of executive orders. His policy style focuses on protectionism and economic nationalism. However, he often bypasses Congress to implement his agenda through executive orders, which has led to political and legal obstacles. Considering these factors, the Fed is expected to adopt a more cautious approach to rate cuts in 2025, with a cut between 0.25% and 0.50% for the year.

Traders have reduced their expectations for a Fed rate cut, with a 50% chance of two cuts in 2025.

According to CME’s FedWatch data, the probability of a 25 basis point rate cut in March stands at 17%, while the probability of maintaining the current rate is 83%.

8. Litecoin and Dogecoin ETF Updates

On January 24, CoinShares submitted the registration statement for its “CoinShares Litecoin ETF.” Additionally, the New York Stock Exchange (NYSE), on behalf of Grayscale, filed a 19b-4 document for the “Grayscale Litecoin Trust,” which includes provisions for converting it into a spot ETF.

On January 30, the U.S. SEC approved Canary Capital’s 19b-4 filing for a spot Litecoin ETF.

On February 5, Litecoin’s official Twitter account announced that the NYSE had submitted the 19b-4 filing for Grayscale’s Litecoin ETF to the SEC, seeking to convert the Litecoin trust into a spot ETF.

On January 29, Bitwise filed an application with the SEC for a Dogecoin-tracking ETF. According to Bitwise’s S-1 filing with the SEC on January 28, the proposed Bitwise Dogecoin ETF will hold DOGE and track its price closely.

9. MicroStrategy Pauses Bitcoin Purchases

Between January 27 and February 2, MicroStrategy did not sell any Class A common stock or purchase any Bitcoin under its stock issuance plan. As of February 2, the company holds approximately 471,107 Bitcoins, worth $30.4 billion.

Since joining the NASDAQ-100 index, MicroStrategy has been subject to various rules and regulations, including lock-up periods to prevent insider trading, which could explain why it has paused Bitcoin purchases. It’s also speculated that the company is adjusting its strategy due to potential tax bills on unrealized Bitcoin gains, which may exceed $19 billion, and needs to plan for tax obligations. Despite this, analysts don’t believe MicroStrategy is abandoning its Bitcoin-focused strategy.

According to data platform Arkham Intelligence, BlackRock, MicroStrategy, and Fidelity have collectively purchased about $94 billion worth of Bitcoin in 2024. Specifically, BlackRock, the world’s largest asset management company, bought $50 billion, MicroStrategy accumulated $24 billion worth of BTC, and Fidelity ranked third after acquiring $20 billion in BTC.

10. Binance “Bestie” Rumors

On February 2, 2024, an anonymous whistleblower letter went viral on social media, accusing key figures at Binance Labs, including Dana and “bestie” Dovey, of manipulating coin prices, bribing for coin listings, colluding offshore to scam retail investors, and other misconduct.

The letter pointed out key figures, such as Dana and Dovey, accusing them of using their positions to engage in improper exchanges of benefits and project operations. If these accusations prove to be true, it would undoubtedly damage Binance’s reputation and trust.

In response to the wave of criticism, He Yi posted a detailed article on social media addressing the rumors. She emphasized the following:

1. Independent Operations and Firewall Mechanism: He Yi clarified that Binance Labs has been rebranded as Yzi Labs and operates independently, under the management of Ella Zhang. There is a strict firewall separating Binance from Labs, ensuring that coin listings and investment decisions are independent.

2. Welcoming Supervision and Reporting: She reaffirmed Binance’s zero-tolerance policy toward bribery and unethical behavior, encouraging whistleblowers and offering rewards for reports of misconduct.

3. Clarification on “Bestie” Rumors: He Yi admitted that there had been instances of improper profiteering using her name in the market, but clarified that she had no special relationship with the people mentioned in the rumors. Regarding the claim of a “bestie,” she welcomed anyone to establish contact with Binance or Labs through proper channels.

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