Crypto markets surged following US President Donald Trump's decision to temporarily halt proposed tariffs on Canada and Mexico. The move came after extensive phone calls with Canadian Prime Minister Justin Trudeau and Mexican President Claudia Sheinbaum, with both countries agreeing to implement policies aimed at curbing the flow of illegal drugs and immigration into the US.

In a statement on February 3, Trudeau revealed that the 25% tariffs would be paused for at least 30 days, allowing both nations to work collaboratively on enhancing border coordination. Trudeau emphasized Canada's commitment to reinforcing security measures by implementing a $1.3 billion border plan, which includes appointing a Fentanyl czar, classifying cartels as terrorists, and strengthening the US-Canada border with helicopters and additional personnel.

Mexico's tariffs have also been paused for a month. Sheinbaum stated that the two leaders had reached a series of agreements to reinforce the land border shared between the countries. She mentioned that their teams would immediately begin working on two fronts: security and trade. While the tariffs are paused for now, Trump indicated in a Bloomberg TV interview that the US and Mexico have not yet agreed on the specifics, and the tariffs could still be enacted.

Following these announcements, the crypto market showed remarkable resilience. Bitcoin, which had hit a low of $92,000 the previous day, surged past the $100,000 threshold to $101,731, according to CoinMarketCap. Ether also demonstrated significant gains, climbing from a low of $2,451 to $2,880. The Crypto Fear & Greed Index, a measure of market sentiment, moved into greed territory with a score of 72 out of 100, signaling improved confidence among investors.

Pav Hundal, lead market analyst at crypto exchange Swyftx, suggested that the recent developments could pave the way for new all-time highs in digital assets. Hundal noted that the pause on tariffs had left investors feeling relieved and optimistic, leading to a complete recovery in many digital assets.

Chris Chung, founder of Solana swap platform Titan, explained that the initial market reaction to the tariffs was an overreaction, as digital transactions are not directly impacted by tariffs. He predicted that if tariffs persist, they might attract more inflows into digital assets, especially as people seek refuge from currency fluctuations and potential inflation.

Overall, despite ongoing trade tensions, the temporary halt on tariffs has brought a sense of optimism to the crypto market, with analysts predicting further growth and stability in the coming weeks.