Bitcoin tumbles below $105,000 amid Trump’s sharp escalation of US-China trade tensions
Bitcoin, the largest cryptocurrency by market capitalization, continued its downward slide on Friday following a significant intensification of the trade dispute between the United States and China. But here's where it gets controversial: this move not only rattled crypto markets but also raised broader questions about the vulnerability of digital assets in times of geopolitical turmoil.
On Friday, U.S. President Donald Trump announced he would double tariffs on Chinese goods entering the U.S. to a staggering 100%. Additionally, he declared stringent export restrictions on "any and all critical software," a retaliatory measure responding to China’s recent decision to limit exports of rare earth minerals—essential components in technologies and manufacturing worldwide.
This fierce back-and-forth triggered a sharp reaction across global markets, causing the key U.S. stock index, the S&P 500, to plunge by over 2%. The knock-on effect spilled over into the crypto world, where Bitcoin plummeted by 8.4%, falling to $104,782 as of 5:20 p.m. Eastern Time (2120 GMT).
Ethereum, the second-largest cryptocurrency, didn’t escape the pressure either, tumbling 5.8% to $3,637 at 5:21 p.m. ET. These steep declines expose the fragile sensitivity of cryptocurrencies to geopolitical developments, challenging the notion that they serve as a safe haven during traditional market upheavals.
And this is the part most people miss: while Bitcoin is often hailed as a hedge against traditional economic risks, its reaction to escalating trade wars suggests it might be more intertwined with global market sentiment than previously believed.
How will this intensified trade conflict shape the future of digital currencies? Is Bitcoin's vulnerability a sign that cryptocurrencies are still too young to withstand geopolitical shocks, or does it reveal an overlooked connection between these digital assets and global economic policies? Share your thoughts below—do you think crypto markets will find resilience, or is this just the beginning of greater volatility?
Reported by Ruchika Khanna in Bengaluru; edited by Diane Craft.
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