Bitcoin Tumbles Over 14% on Trump China Tariff Announcement

The crypto market experienced a sharp downturn on Friday as President Donald Trump revealed plans for a 100% tariff on all imports from China. This move came swiftly after Beijing announced stricter controls on its rare earth elements exports, materials essential for electronics and renewable energy technologies. Bitcoin, the leading digital asset, saw its value swing wildly in response, highlighting the sector’s sensitivity to global trade tensions.

In the hours following the announcement, Bitcoin plummeted from a daily peak of $121,727 to a low of $104,953, marking a drop of more than 14%. Trading volume surged as investors reacted to the news, with over $250 million in positions liquidated in a single hour. By late afternoon, the price had clawed back some ground, stabilizing around $113,000 as buyers stepped in at perceived support levels.

Ethereum and Altcoins Face Steeper Declines

Ethereum, the backbone of decentralized finance and smart contracts, bore the brunt of the sell-off among major tokens. Its price fell from $4,377 to $3,504, a decline exceeding 20% that outpaced Bitcoin’s volatility. This drop contributed to a broader market wipeout, with total crypto capitalization shedding approximately $200 billion in value over the session.

BNB, XRP, and Solana also suffered notable losses, each dipping between 15 and 25% from their intraday highs before partial recoveries. These movements reflected widespread investor caution, as altcoins often amplify Bitcoin’s trends during periods of uncertainty.

Trump’s declaration was made via a post on Truth Social, where he addressed China’s recent export restrictions on rare earths, which dominate over 80% of the global supply. These elements power everything from smartphone components to electric vehicle batteries, and disruptions could ripple through supply chains reliant on affordable imports. The president framed the tariff as a direct countermeasure, stating it would apply over and above existing duties and take effect on November 1 or earlier if needed.

Analysts note that rare earth constraints could inflate costs for mining hardware and data centers, sectors intertwined with cryptocurrency operations. While some observers view the policy as a negotiating tactic to pressure Beijing into easing restrictions, others warn it risks accelerating a full-scale economic standoff.

Market participants watched stock indices closely, as the S&P 500 reversed gains and closed lower amid the news. Tech-heavy Nasdaq futures pointed to further pressure overnight, underscoring the interconnected risks between traditional finance and digital assets.

As the dust settles, Bitcoin’s resilience in bouncing back suggests underlying demand remains intact, buoyed by institutional adoption and halving cycle momentum. Yet the episode serves as a reminder of macroeconomic forces that can override bullish narratives in crypto. Traders now eye upcoming economic data releases for clues on whether this tariff threat will solidify or soften in the coming weeks.