Bitcoin and Ethereum, the two major cryptocurrencies, crashed after United States President Donald Trump announced a 100% tariff on ‘any and all critical software’ import goods from China. The continuing trade tensions between the two countries were significantly heightened by this move.
According to Reuters, Bitcoin had dropped 8.4% to £78,000 ($104,782) as of 21:20 GMT. Ethereum also had a 5.8% decline, settling at £2,700 ($3,637).
XRP, DOGE and Ada fell around 19%, 27%, and 25% in the last 24 hours, respectively, Bloomberg reported.
Crypto prices have taken a nosedive as investors react to fears about the economy and global trade, particularly in light of Trump’s recent declaration about tariffs on Chinese imports.
Analysts claim that the sell-off is at least partially attributable to the flight from risk assets, which traders are preparing for in anticipation of further volatility in both the traditional and digital markets as a result of the rising tensions between Washington and Beijing.
The tariff measure, which tries to put pressure on China over trade and manufacturing, has increased market risk. Thus, many crypto investors have moved their money to stablecoins or sought out safer assets.
The crypto market has been trending downwards throughout the week. Coinglass data shows that in the previous 24 hours, there has been the biggest wave of liquidations since early April, wiping off investments valued almost £7.5 billion ($10 billion). Less liquid and smaller tokens have taken the brunt of the market crash.
Global Sell-Off
Trump’s announcement of intentions to drastically boost tariffs on Chinese imports caused global markets to sell down. The US president took this action after accusing China of trying to ‘monopolise’ vital resources via its new export limits on rare-earth elements.
There were fears of a worldwide supply chain shock due to the new export limits, which targeted the defence, semiconductor, and artificial intelligence industries.
The S&P 500 and the Nasdaq both fell by 2% and 2.7%, respectively, as risk assets generally declined.
Escalating Trade War
Trump made the huge policy announcement on the Truth Social platform. The new measures are set to go into effect on 1 November 2025. The administration’s position in its economic dispute with Beijing has become far more rigid as a result of this move.
The trade conflict has reached a new level of intensity as China has expanded its export prohibitions to include foreign-made items that use Chinese rare-earths, either directly or indirectly. These restrictions will be in place next month.
According to Trump, his decision was a direct response to China’s ‘extraordinarily aggressive’ stance on global trade. He added that these new Chinese regulations would have far-reaching consequences, saying that many nations will be affected by them, not just the US.
In addition, the president has added a layer of strategic uncertainty by hinting that the new tariffs’ implementation date may be accelerated based on China’s response. meanwhile, he announced that additional US export restrictions will be implemented on the same November date, in an effort to heighten the level of pressure.