The global crypto market suffered a steep decline after U.S. President Donald Trump reaffirmed his plan to impose 100% tariffs on Chinese imports, despite acknowledging that the measure is “unsustainable” in the long run.
Crypto market reels from tariff shock
On Friday, October 17, Bitcoin dropped 5%, deepening its 13% weekly loss, while the broader cryptocurrency market fell by 5.75%, according to market data. The top 20 cryptocurrencies also saw an average decline of around 5%, signaling widespread panic across digital assets.
The latest market downturn coincided with Trump’s public justification for the new trade measure. Though he admitted the 100% tariffs were not sustainable indefinitely, Trump blamed China’s trade policies and currency practices for the renewed escalation.
Trade war fears intensify
The tariff announcement follows a fresh wave of economic tensions between Washington and Beijing. China recently expanded export restrictions on rare earth minerals, a vital resource for U.S. technology and defense industries. In response, the U.S. imposed additional export controls on Chinese software and semiconductor access.
Trump also confirmed he would meet Chinese President Xi Jinping in two weeks during a conference in South Korea, signaling a potential diplomatic thaw. However, market participants remain skeptical, fearing that prolonged trade disputes could destabilize both global growth and risk-on markets like crypto.
Bitcoin and risk assets retreat as gold soars
The ripple effect of Trump’s tariff stance was felt across the global economy. Analysts at the Federal Reserve warned that such high tariffs could weigh heavily on economic growth, employment, and inflation.
As investor sentiment soured, risk-heavy assets such as technology stocks and cryptocurrencies saw heavy sell-offs. In contrast, gold surged to an all-time high of $4,250 per ounce, reinforcing its position as the preferred safe-haven asset amid economic uncertainty.
Market outlook: volatility ahead
While some analysts expect crypto markets to stabilize once the political tension eases, others believe the volatility could persist. “A 100% tariff effectively signals a full-blown trade war,” said one analyst. “Until there’s policy clarity, investors will seek refuge in assets like gold and treasuries rather than speculative instruments like Bitcoin.”
Still, long-term crypto supporters argue that Bitcoin’s decentralized nature could eventually make it a hedge against trade-related financial instability—similar to gold’s role today.
