What hit the crypto market hard during the Spring Festival holiday?

For the crypto market, this is an uneasy Spring Festival: Trump launched a tariff war, causing a sharp drop in the crypto market; Deepseek was released, and the market reacted violently; El Salvador cancelled Bitcoin's official currency status; the Federal Reserve continued to maintain its decision not to cut interest rates...

Golden Finance has compiled the top ten crypto news that happened during the Spring Festival to take you back to this unforgettable Spring Festival.

1. Trump starts a tariff war

Trump vs. Canada and Mexico

On January 31, local time, Carolyn Levitt, the White House press secretary, said at a briefing that it was confirmed that a 25% tariff would be imposed on Mexican and Canadian goods from February 1. On January 30, local time, US President Trump said that he planned to fulfill his promise to impose a 25% tariff on goods imported from Mexico and Canada on February 1.

Trump also posted on the "Truth Social" platform that if Canada becomes the 51st state of the United States, it will be "tariff-free!" The president wrote: "Therefore, Canada should become our cherished 51st state. Canadians will enjoy much lower taxes, much better military protection, and - no tariffs!"

In response, Canadian Prime Minister Trudeau said at a press conference that Canada will impose a 25% tariff on US goods worth 155 billion Canadian dollars, including immediate tariffs on goods worth 30 billion Canadian dollars starting on Tuesday, and further tariffs on US products worth 125 billion US dollars will be implemented after 21 days.

Trump vs. China

At around 8 p.m. Eastern Time on February 1, the White House released a list of facts, announcing that a 10% tariff would be imposed on Chinese products exported to the United States due to issues such as fentanyl.

China is strongly dissatisfied with this and firmly opposes it. The unilateral tariff increase by the United States seriously violates the rules of the World Trade Organization. It is not only unhelpful in solving its own problems, but also undermines the normal economic and trade cooperation between China and the United States. China will file a lawsuit with the WTO for the wrong practices of the United States and will take corresponding countermeasures to firmly safeguard its own rights and interests.

On February 4, the Tariff Commission of the State Council issued an announcement: With the approval of the State Council, additional tariffs will be imposed on some imported goods originating from the United States from February 10, 2025. A 15% tariff will be imposed on coal and liquefied natural gas, and a 10% tariff will be imposed on crude oil, agricultural machinery, large-displacement cars, and pickup trucks.

Trump vs. the EU

On February 2, local time, US President Trump said he would "definitely" impose new tariffs on the European Union. He once again complained about the US trade deficit with the EU and believed that the EU's imports of US cars and agricultural products were insufficient. Trump did not specify the level of tariffs or the timetable. "I won't say there is a timetable, but there will be one soon," he told the media.

The European Union said it would "respond firmly" if the United States imposed tariffs on it, the latest sign of dissatisfaction with President Trump's trade policies, whose effects are spreading around the world. 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 said that the United States will impose tariffs on imported goods such as computer chips, medicines, steel, aluminum, copper, oil and natural gas as early as mid-February.

But on February 3, Trump temporarily put down the tariff stick.

Canadian Prime Minister Trudeau said after a phone call with US President Trump that the US will suspend additional tariffs on Canada for at least 30 days. Earlier on February 3rd local time, Trump spoke with Mexican President Sheinbaum. Both announced after the call that the United States and Mexico agreed to immediately suspend the implementation of additional tariffs for one month and continue negotiations.

2. The “tariff war” shocked the market

After the announcement that the United States will impose a 25% tariff on Canada and Mexico, the U.S. dollar index DXY rebounded by as much as 69 points from the intraday low to 108.48, and the U.S. dollar against the Canadian dollar USD/CAD erased its previous losses and turned up again. Spot gold once fell to $2,795.34 per ounce. Bitcoin fell below $103,000 per coin, down 1.67% on the day. The declines of U.S. and Brent crude oil narrowed and were close to flat, at $72.89 per barrel and $77.02 per barrel, respectively.

Since then, the crypto market has continued to fall. As of February 3, BTC fell to around $92,876.12, the lowest level in more than two weeks, down 12.29% from $105,893 on January 30. ETH's market was even worse, falling to $2,460.55, down nearly $1,000 from $3,422 on February 1, a drop of 28.10%.

The sell-off in altcoins was even more intense. DOGE recorded a new low of $0.2237, down 34% from $0.3398 on January 1. Altcoins such as XRP, ADA, AVAX and LINK all fell by more than 10%.

Financial markets in Japan and South Korea also suffered a heavy blow: South Korea's KOSPI index closed down 64.04 points, or 2.54%, at 2453.33 points on February 3 (Monday). The Nikkei 225 index closed down 1052.40 points, or 2.66%, at 38520.09 points on February 3. Affected by the US tariff order, the yield on 10-year newly issued government bonds in the Japanese bond market, which is the main indicator of long-term interest rates, once rose to 1.260%, the highest point since April 2011.

In this regard, many institutions or industry insiders expressed their views:

• Larry Summers, former U.S. Treasury Secretary, said in an interview that Trump's tariff policy goes against economic logic. It means higher prices for consumers and much higher input costs for U.S. producers. Summers questioned: Why, of all the countries in the world, do we now decide to wage economic war against Canada? Canada has a higher minimum wage, a higher base wage, and unions protect workers more than the United States. I just don't understand the logic of these policies. There is no doubt that this is a regressive tax on American consumers.
  

• Citi said that we believe that further escalation of tariffs will lead to a bullish view on gold in 6-12 months, with gold prices rising to $3,000 per ounce; at the same time, it is bullish on silver, which will rise to $36 per ounce; we are also bearish on copper prices, which will fall to $8,500 per ton in the next three months.
  

• JPMorgan said it is bearish on base metals in the short term due to US tariff policy and reinforces its bullish view on gold. London Metal Exchange (LME) base metal prices may face severe bearish pressure in the near term due to economic growth concerns, fading macro risks and a stronger US dollar.

• JPMorgan Chase & Co. analysts Eric Beinstein and Nathaniel Rosenbaum said Trump’s proposed tariffs are unlikely to have a significant impact on investment-grade credit risk or spreads unless high tariffs are imposed on the European Union or economic conditions force the Federal Reserve to raise interest rates.
  

• Robert Kiyosaki, author of Rich Dad Poor Dad, tweeted that gold, silver, and Bitcoin may collapse as Trump's new tariff policy takes effect. But the price collapse also brings more buying opportunities. The real problem is debt, which will only get worse.

• “Trump’s tariff policy is affecting the entire market, and concerns about a trade war and stagflation-induced recession are spreading to altcoins and Bitcoin markets,” said Caroline Bowler, CEO of BTC Markets .

• Jeff Park, head of strategy at Bitwise Alpha , said tariffs may only be a temporary tool, but the long-term conclusion is that Bitcoin will not only go higher, but also go faster because "both sides" in the trade imbalance equation want Bitcoin, so the end result is the same: higher prices and faster speeds.

• Petr Kozyakov, CEO of crypto payment platform Mercuryo, pointed out that after Trump announced the tariffs on Friday, a wave of FUD swept the cryptocurrency market, and the prospect of long-term interest rate hikes shook all markets around the world. Although Bitcoin has fallen below the $100,000 mark, the king of cryptocurrencies has once again proved itself to be unique, in stark contrast to the altcoins that have fallen across the board. Bitcoin plunged to just over $91,000 overnight, with a minimum drop of nearly 10%, and then rebounded to around $95,000. Other major cryptocurrencies fell even more, with Ethereum falling about 20%, and Solana seemed to perform better relative to Ethereum, falling only 6%.
  

3. Deepseek was launched, shocking the technology and crypto markets

On January 27, Deepseek became the number one in Apple's US APPStore, surpassing ChatGPT. DeepSeek has performed well recently. With its low price strategy of RMB 0.1 per million tokens and excellent performance, DeepSeek has attracted the attention of technology giants including Meta.

On Monday, January 27, Eastern Time, DeepSeek triggered a sharp drop in AI stocks, and the market value of European and American technology stocks evaporated by $1.2 trillion. European and American chip manufacturers and companies in the entire industry chain that power AI and data centers all fell. Among them, Nvidia closed down 16.97%, and its market value evaporated by $592.658 billion (about RMB 4.3 trillion) in one trading day, the largest scale in the history of US stocks.

The competitive AI model released by DeepSeek has triggered market concerns about its threat to the US's technological leadership, and Japanese chip stocks have fallen sharply. Nvidia supplier Advantest fell 8.2%, Disco Corp fell 2.9%, SoftBank Group fell 5.4%, and data center cable manufacturers Furukawa Electric and Fujikura Ltd both fell more than 8%. Market participants pointed out that the huge investment returns of large technology companies in the field of AI are in doubt, and DeepSeek may be the key factor in triggering the pullback of technology stocks.

The crypto market also reacted violently.

According to GMGN market data, on January 27, the market value of DeepSeek's eponymous meme coin SEEK was reported at 40 million US dollars, and the price was reported at 0.0376 USDT, with a 1-hour increase of 70%. On January 28, DeepSeek-based AI project VVV rose to above 17 US dollars, with a 24-hour increase of 103.7%.

Other tokens are obviously not so lucky, especially AI-related tokens have been greatly affected. The total market value of cryptocurrencies in the field of artificial intelligence has been hit hard, falling 10% to $42.50 billion from $47.54 billion on January 26. Trading volume increased by more than 42% in 24 hours to $3.55 billion, increasing the intensity of seller pressure. In addition, the downturn in the cryptocurrency market has been accompanied by a wave of leveraged liquidations. Leverage allows traders to borrow funds to increase trading positions, thereby amplifying potential gains and losses. The latest data shows that the crypto market has seen nearly $860 million in liquidations in the past 24 hours, of which $794 million were long liquidations. $260 million of Bitcoin long positions have been liquidated.

• U.S. President Donald Trump told a Republican conference in Miami, Florida, that the rise of Chinese artificial intelligence startup DeepSeek should serve as a "wake-up call" for American businesses and that U.S. companies "need to focus on competing to win."
  

• Nvidia Corp NVDA.O called DeepSeek a "remarkable advance in artificial intelligence." An Nvidia spokesman said DeepSeek's work showed how to use widely available models and limited computing power to create new models.

• Ejaaz Ahamadeen, formerly the global digital asset architect at Ethereum developer ConsenSys, wrote in an article on X: "DeepSeek just accelerated all the timelines. We previously accepted the 'fact' that these products would cost $100 billion to build, that they would be closed source, and that they would form a monopoly. Then DeepSeek surpassed all the leading models at a very low cost, and open sourced the technology, and now any AI builder can access this most powerful model. Why is no one talking about how we will see 'better agents'? The fat application theory has become more real. This is great for open source AI."
  

• The founder of Black Myth Wukong commented on DeepSeek: It may be a national-level scientific and technological achievement.

• ai16z founder Shaw published an article to comment on large models such as Deep Seek. He pointed out that the field of AI is undergoing an open source revolution. From Google, OpenAI, Claude to today's DeepSeek, major AI laboratories have continuously achieved breakthroughs in benchmarking and capabilities. Shaw emphasized that open source models like DeepSeek are a major boon to the entire industry because they can help developers scale AI applications to millions of users at a lower cost. As AI models are gradually commercialized, this technology is moving towards being free, open source, and running at zero cost on home computers.

• Nirgunan Tiruchelvam, head of consumer and internet at Aletheia Capital , said the DeepSeek product "seriously undermines Silicon Valley's argument that the massive capital and operating expenses that go into AI are the best way to respond to the AI ​​trend. It casts doubt on the massive resources that are being put into AI."

• Jack Clark, co-founder of Anthropic , said DeepSeek's progress challenged the perception that the West had a clear lead in artificial intelligence.

4. Crypto Tsar David may change the crypto industry

Recently, the Crypto Czar has been very active and has made many comments that are favorable to the crypto industry:

On February 5, Crypto Czar David Sacks reiterated his work goals of "clarifying the crypto regulatory framework", "ensuring that crypto innovation occurs in the United States", and "creating a golden age of digital assets" at a press conference that started at 3:30 Beijing time, but no new content was announced.

Crypto czar David Sacks also said that he is studying the feasibility of Bitcoin reserves. He regards NFTs and Memecoins as "collectibles" rather than securities or commodities. Collectibles have different tax procedures than securities and commodities.

David Sacks was asked on Fox News TV talk show when the United States would announce a strategic Bitcoin reserve. David Sacks said: "Trump has asked us to look into this issue, and this is one of the things we are currently looking at." He also praised President Donald Trump's executive order on cryptocurrencies. The order aims to clarify regulations, define digital assets, and strengthen the dominance of the US dollar through stablecoins. According to Sacks, the newly formed Digital Asset Task Force will oversee regulatory developments. It will classify digital assets into categories such as securities, commodities, and collectibles. The government also seeks to expand the use of stablecoins, believing that it can drive demand for U.S. Treasuries. Sacks believes that this strategy can support Treasury bonds and reduce long-term interest rates.

5. El Salvador removes Bitcoin from official currency

On February 2, the ruling party-controlled El Salvador Congress just quietly approved a reform of the Bitcoin law that invalidates the use of Bitcoin as an official currency and leaves it to the discretion of users. The reform comes after nearly two years of pressure from the International Monetary Fund (IMF), which set a condition of "de-risking Bitcoin" in exchange for Kenyan President Nayib Bukele approving a much-needed $1.4 billion loan. If the Salvadoran government wants to receive the money, it must change the law by the last day of January. More than three years after the law was implemented, deputies have amended six of its articles and repealed three of the sixteen. From now on, Bitcoin will no longer be considered "currency"; its acceptance will be voluntary instead of mandatory, and it will not be used to pay taxes.

As of February 3, El Salvador held 6,056.18 BTC, equivalent to approximately $586 million.

6. Trump signs executive order to establish sovereign wealth fund

U.S. President Trump signed an executive order on February 3rd to create a U.S. sovereign wealth fund. The White House said the order instructs the Treasury and Commerce departments to begin reviewing the process of establishing a sovereign wealth fund.

"We're going to start this over the next 12 months. We're going to liquidate assets on the U.S. balance sheet for the American people," Treasury Secretary Benson said. He mentioned that they plan to study "best practices" from other funds and that the fund would hold a range of liquid assets and other U.S. assets. Trump mentioned this idea several times during his campaign. He called for the establishment of a fund that would "invest in great national causes for the benefit of all the American people," such as infrastructure construction and medical research.

It is unclear where the funding for the U.S. sovereign wealth fund would come from. Most sovereign wealth funds are made up of surplus revenues generated by natural resources, such as in oil-rich Saudi Arabia. However, the U.S. faces major budget and trade deficits. It also has strong private markets, which allow investors to support the kinds of initiatives that Trump mentioned the new fund hopes to invest in.

Trump also said that the fund might acquire TikTok. After signing the executive order to establish a sovereign wealth fund, Trump said in a speech, "We will use it to do something, maybe to acquire TikTok, or maybe not... If we get the right deal, we will do it, if not, we won't do it... We may put this deal into the sovereign wealth fund, or we may work with very wealthy people."

Bitcoin advocate and U.S. Senator Cynthia Lummis mentioned Bitcoin in response to the news. She posted on X that "this is a big deal" and used the Bitcoin symbol, which excited cryptocurrency enthusiasts. It is not clear how the U.S. sovereign wealth fund will be constructed and funded. According to the New York Times and the Financial Times, the Biden administration also considered setting up such a fund last November before Trump was elected.

• Danny McCabe, CEO of Flexa , pointed out: “Given the United States’ clear support for digital assets, the sovereign wealth fund is likely to include Bitcoin, and possibly even other ‘made in the U.S.’ digital assets with real economic utility, such as Ethereum. The inclusion of these digital assets will not only provide greater stability for the U.S. economy, but will also be a big leap in making the United States a leader in the digital asset space.”

• Omni Network co-founder Austin King said Trump’s creation of a sovereign wealth fund could be an alternative to acquire Bitcoin without the bureaucracy.

7. The Federal Reserve released its decision: no interest rate cut

On January 30, the U.S. Federal Reserve announced that it would maintain the target range for the federal funds rate at 4.25% to 4.5% and continue to shrink its balance sheet at the original pace. The Fed's decision was in line with market expectations.

On February 4, Fed Chairman Collins said that the Fed should remain patient and cautious about its policies and there is no need to rush to adjust interest rates. There is no urgency to cut interest rates again at present. The Fed should remain patient and cautious about its policies and there is no need to rush to adjust interest rates. At some point in the future, we expect to see further normalization of interest rates.

• Trump said the Federal Reserve's decision to keep interest rates unchanged last week was "correct under the circumstances."

• Fed's Bostic : Be prepared to wait for a while before cutting interest rates.

• Morgan Stanley economists said they no longer expect the Fed to cut interest rates in March and now expect a rate cut in June this year. The Trump administration has imposed tariffs faster than we expected, which may mean that the decline in inflation will stagnate at a higher inflation level, thus blocking the possibility of any interest rate cuts in the near term.
  

• Galaxy Securities released a research report showing that considering the performance of the US economy at the end of 2024 and the current economic data, the US economy has shown a certain growth momentum and resilience. Since taking office on January 20, Trump has quickly signed a series of executive orders. His policy style emphasizes protectionism and economic nationalism, but he often bypasses Congress to advance his agenda through executive orders, so his implementation process also faces many political and legal obstacles. Taking these factors into account, the Federal Reserve is expected to take a more cautious path of interest rate cuts in 2025, with an annual interest rate cut of between 0.25% and 0.50%.

• Traders cut bets on the Federal Reserve to cut interest rates and now see a 50% chance of two cuts by 2025.
  

• According to CME Federal Reserve Watch data, the probability of the Federal Reserve cutting interest rates by 25 basis points in March is 17%, and the probability of maintaining unchanged interest rates is 83%.

8. Litecoin and Dogecoin ETF progress

On January 24, CoinShares filed a registration statement for the “CoinShares Litecoin ETF.” In addition, the New York Stock Exchange (NYSE) filed a 19b-4 filing for the “Grayscale Litecoin Trust” on behalf of Grayscale, which contains terms for converting the trust into a spot ETF.

On January 30, the U.S. Securities and Exchange Commission approved the 19b-4 filing submitted by Canary Capital for its spot Litecoin ETF.

On February 5, Litecoin's official Twitter account announced that NYSE has submitted a 19b-4 filing application for Grayscale's Litecoin ETF to the US SEC, seeking to convert its Litecoin (LTC) Trust into a spot ETF.

On January 29, Bitwise has submitted an application to the U.S. Securities and Exchange Commission (SEC) to list an exchange-traded fund (ETF) that tracks the price of Dogecoin. According to the S-1 document submitted by Bitwise to the SEC on January 28, the proposed Bitwise Dogecoin ETF will hold DOGE and closely track its price movements.

9. MicroStrategy suspends coin purchases

MicroStrategy did not sell any Class A common stock under the stock offering plan between January 27 and February 2, nor did it purchase any bitcoin. As of February 2, the company held approximately 471,107 bitcoins, with a total purchase price of $30.4 billion.

Since its recent inclusion in the Nasdaq 100 Index, MicroStrategy has been subject to various rules and regulations, such as lock-up periods, to prevent potential insider trading, which may be one reason why its continued accumulation of Bitcoin has been suppressed. In addition, some people speculate that the choice to suspend the accumulation of Bitcoin is because MicroStrategy is changing its strategy based on market conditions. The company may face a huge tax bill for unrealized Bitcoin gains, which may exceed $19 billion, so financial planning must be carried out to cope with tax obligations. However, analysts believe that there is little sign that MicroStrategy is abandoning its Bitcoin-centric 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, alone purchased $50 billion, while MicroStrategy managed to accumulate $24 billion worth of BTC. Fidelity ranked last after acquiring $20 billion worth of BTC.

10. Binance "Bestie Rumors"

On February 2, 2024, the first anonymous complaint was widely circulated on the Internet. The letter detailed possible misconduct by Dana, the head of Binance Labs' investment department, and Dovey, He Yi's "best friend", including manipulating coin prices, soliciting bribes to list coins, and colluding with overseas parties to cut leeks.

Several key figures mentioned in the letter, such as Dana and Duowei, were accused of taking advantage of their positions to participate in improper interest exchanges and project operations. If these allegations are true, they will undoubtedly cause significant damage to Binance's symbol and credibility.

In response to the overwhelming doubts, He Yi published a long article titled "Reasoning and Caution" on social media, responding in detail to the rumors. She emphasized:

1. Independent operation and firewall mechanism: He Yi pointed out that Binance Labs has been renamed Yzi Labs, which is independently operated and headed by Ella Zhang. There is a strict firewall mechanism between Binance and Labs, and the listing and investment decisions are independent of each other.

2. Supervision and reporting are welcome: She reiterated Binance’s zero-tolerance policy on bribery and misconduct, publicly supported any reports of employees soliciting bribes or misconduct, and stated that the reward for reporting is always effective.

3. Clarification of the "best friend" rumor: He Yi admitted that there was a phenomenon of improper profiteering in her name in the market, but she had no special relationship with the person mentioned in the rumor. Regarding the statement of "He Yi's best friend", she said that anyone is welcome to establish contact with Binance or the lab through normal channels.