In a dramatic turn for both global markets and the crypto space, Bitcoin and Ethereum saw sharp declines following former President Donald Trump’s confirmation of a 104% tariff on Chinese goods. The announcement, which reignited concerns of a full-scale trade war, sent shockwaves through financial markets, including the typically uncorrelated cryptocurrency sector.
Bitcoin dropped nearly 6% in the hours after the statement, falling below key psychological support at $65,000. Ethereum followed suit, sliding over 7% to hover near the $3,200 mark. The broader crypto market echoed the trend, with altcoins like Solana and Avalanche experiencing double-digit percentage losses.
Analysts suggest that the crypto selloff is tied to a combination of risk-off sentiment and macroeconomic uncertainty. “This isn’t just about China and the U.S. anymore — it’s about how global capital responds to increased geopolitical tension,” said Anna Patel, a digital asset strategist at BlockView Markets.
The 104% tariff, confirmed by Trump during a campaign event, is aimed at curbing Chinese dominance in sectors such as electric vehicles and technology. However, market watchers fear it could trigger retaliatory moves from Beijing, destabilizing global trade and tightening liquidity.
Cryptocurrencies, often seen as a hedge against traditional market turmoil, have increasingly behaved like risk assets in times of heightened uncertainty. The sudden volatility also prompted over $300 million in liquidations across crypto derivatives, according to data from Coinglass.
Despite the downturn, some investors view this as a short-term reaction. “Bitcoin and Ethereum are still fundamentally strong,” said Raj Desai, an independent crypto analyst. “But in the face of aggressive political moves like this, even decentralized assets aren’t immune to fear-driven selling.”
With global eyes on the U.S.-China economic dynamic, crypto markets may remain volatile in the days to come.
