Crypto Drops Hard as U.S.-China Tensions Spike
The crypto market took another brutal hit today, as President Donald Trump announced a fresh round of tariffs on Chinese imports, raising duties and tariffs, now totaling 145%, including previous measures. Notably, China is being excluded from a 90-day global tariff pause, adding fuel to an already tense trade standoff.
Markets reacted sharply. In just the past hour, Bitcoin dropped 3%, Ethereum plunged 7%, Solana slipped 6%, and XRP fell 4%. Overall, the crypto market cap fell by 4%, erasing yesterday’s temporary recovery.
Why the Tariff Hike Is Crushing Crypto
Traders see the U.S.-China tariff escalation as a threat to global economic stability. The aggressive stance on China — while temporarily easing tensions with other nations — has increased investor uncertainty, pushing capital out of high-risk assets like cryptocurrencies.
Risk-off sentiment is clearly back, and crypto is once again caught in the crossfire of macro geopolitics.
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EU-China Talks Could Offer a Glimmer of Hope
In a surprising turn, China and the European Union announced plans to begin negotiations aimed at removing EU tariffs on Chinese electric vehicles (EVs). The move signals a potential shift toward diplomacy, at least between China and key global partners outside the U.S.
While it’s too early to say whether this could influence U.S.-China relations, any sign of a broader trade de-escalation might quickly revive risk appetite — and with it, crypto prices.
What Happens If a Deal Is Reached?
If the U.S. and China move toward re-opening trade negotiations, analysts believe crypto markets could see an immediate reversal. Risk assets have been reacting almost instantly to macro headlines, and a resolution — or even progress toward one — could drive:
- Bitcoin back above $100K
- Ethereum reclaiming $2K
- Altcoins bouncing double digits
However, the longer uncertainty lingers, the more likely crypto stays under pressure.
