Crypto markets crash $19B after Trump targets Chinese tech
Bitcoin fell 8.4 percent to $104,782 following heightened tensions in the US-China trade conflict. The decline came after US President Donald Trump announced a 100 percent tariff on Chinese tech exports and new export restrictions on key software. The announcement triggered a sharp reaction across global financial markets, leading to significant losses in cryptocurrency value.
Donald Trump’s announcement sparked market meltdown
Bitcoin had a precipitous plunge following the announcement of higher tariffs, which led to a general market slump. With notable losses in key assets like Ethereum, BNB, and XRP, the cryptocurrency industry saw a value decline of almost $19 billion.
Trump called China’s export restrictions on rare earths excessively harsh in his statement on Truth Social. He responded by tightening export restrictions on vital software and levying 100 percent tariffs on Chinese tech exports. Global market financial instability increased as a result of the announcement.
Coinglass reported that 1.6 million traders were liquidated within 24 hours, with over $7 billion in positions sold in less than an hour. The rapid sell-off intensified market losses. Exchanges such as Binance experienced high liquidation volumes, and analysts estimate total liquidations could surpass $30 billion.
Bitcoin bears take control
In less than an hour, Bitcoin fell from about $113,000 to $102,000 before levelling off at about $104,782. This was the sharpest drop since 2020. Selling pressure persisted even if the $102,000 support level momentarily held. Price volatility has usually resulted from such steep declines.
Ethereum declined 5.8 percent to $3,637, BNB dropped 6.6 percent to $1,094.09, and XRP fell 22.85 percent to $2.33, reducing its market capitalisation by over $140 billion. Tether decreased slightly by 0.1 percent, indicating cautious investor sentiment across the crypto market.
Cryptocurrencies, being relatively new and decentralised, are highly responsive to geopolitical developments. Events like trade disputes, tariff changes, and political instability often lead to investor uncertainty and widespread selling.
Trade tensions intensify
The recent tariff measures are part of ongoing trade disputes between the US and China. Rare earth minerals, essential for electronics and clean energy, are now central to the conflict. The new tariffs reflect the growing link between geopolitical decisions and financial markets.
The S&P 500 declined over 2 percent as investors moved towards safer assets like bonds and the US dollar. The policy shift in Washington triggered volatility across global financial markets.
Outlook from analysts
Edul Patel of Mudrex noted that despite the correction, sentiment remains optimistic, citing past October recoveries averaging 21%. Brian Strugats from Multicoin Capital cautioned that counterparty risks could lead to broader financial instability.
Patel said, “The crypto market is reacting strongly to Trump’s announcement of a 100 percent tariff on China, with a total market cap standing at $3.74 trillion. Bitcoin briefly tested $102,000 levels before recovering to the $113,000 range. Historically, October corrections (as seen between 2017 and 2022) have often been followed by relief rallies of up to 21 percent. Despite the short-term selling pressure, overall sentiment remains bullish.”
Some analysts view the current decline as a potential entry point, contingent on Bitcoin holding key support levels. Others warn that if financial stress spreads, the downturn could persist.
ETFs and market rotation
Investors from institutions are keeping an eye on possible capital movements from gold to cryptocurrency. In the event of short-term market turbulence, anticipated approvals of US spot altcoin ETFs could provide liquidity and aid in market stabilisation. In order to control risk, investors are concentrating on structured approaches like dollar-cost averaging. During times of market volatility, careful position sizing and strict risk management are essential.
In the past, October has seen corrections in Bitcoin followed by periods of rebound. Investors had opportunities during these bounces, which averaged about 21 percent between 2017 and 2022. Global political issues are having an increasing impact on cryptocurrency markets. Decisions by major economies can trigger widespread market reactions, highlighting crypto’s growing integration with global financial systems.
