Crypto Market Plunges Over 9% After Trump's Retaliatory China Tariffs

Key Takeaways

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Bitcoin fell nearly 8%, dropping below $105,000 following Trump's tariff announcement

Total cryptocurrency market capitalization declined over 9% to $3.8 trillion, losing more than $125 billion in value

Ethereum plummeted 12%, while XRP, SOL, and BNB experienced double-digit losses ranging from 11.9% to 17.6%

Futures liquidations exceeded $7 trillion, with crypto-related stocks also suffering significant declines

The tariffs, set to begin November 1 or earlier, represent a 100% rate on Chinese imports in response to rare earth element export restrictions

/ Market Devastation Following Tariff Announcement
Cryptocurrency markets experienced their second major downturn on Friday after President Donald Trump confirmed the implementation of 100% tariffs on imports from China. Bitcoin dropped approximately 8% immediately following the announcement, breaking below the $105,000 threshold. Other major cryptocurrencies performed even worse during the sell-off.

Ethereum's native token declined nearly 12%, while the subsequent three largest cryptocurrencies by market capitalization—BNB, XRP, and SOL—fell by 11.9%, 17.6%, and 12.8%, respectively. The widespread impact affected virtually all major digital assets across the market.

Broad-Based Crypto Losses
The majority of tokens within the top 300 by market capitalization experienced double-digit percentage declines, though many have since recovered slightly from their lowest points. The GMCI 30, representing a selection of the top 30 cryptocurrencies, dropped 13% to 200.28.

Crypto-related equities also faced severe pressure. Mining company Bitdeer (BTDR), stablecoin issuer Circle (CRCL), and Ethereum treasury firm Bitmine (BMNR) led the losses among crypto stocks. The Official Trump token fell 30% to $5.41, marking an all-time low since its January launch.

Tariff Escalation and Market Response
Trump announced via Truth Social his decision to raise tariffs on China in direct response to Beijing's tightening control over rare earth element exports. The new tariffs are scheduled to take effect on November 1 or potentially sooner.

"It is impossible to believe that China would have taken such an action, but they have, and the rest is History. Thank you for your attention to this matter!" Trump stated in his post.

The cryptocurrency market initially shed at least $125 billion when Trump first threatened countermeasures earlier on Friday. By day's end, crypto's total market capitalization had fallen over 9% to $3.8 trillion.

Trading Infrastructure Under Strain
Daily liquidations of futures long positions on crypto exchanges surpassed $7 trillion by 6:30 p.m. ET. However, these liquidation figures are based on publicly available data, which may understate the true extent of market liquidations due to API limits and incomplete reporting practices.

Several users reported trading difficulties on certain exchanges during the heightened volatility. Binance acknowledged the issues, stating: "Due to heavy market activity, our systems are under high load. Some users may experience intermittent delays or display issues. We're actively monitoring the situation and working to resolve it. Funds are SAFU."

Sector-Specific Impact
The downturn affected various cryptocurrency sectors differently. Top RWA (Real World Asset) tokens declined 17.93%, while Base network tokens fell 19.94%, indicating that newer and more speculative sectors experienced steeper losses during the market panic.

The severity of the sell-off highlights the continued sensitivity of cryptocurrency markets to macroeconomic events and geopolitical tensions, particularly those involving major economies like the United States and China.