Trade War Tariff Threat Sparks Crypto Sell-Off
In early November, President Donald Trump officially declared a full-scale trade war with China, threatening 100% tariffs on Chinese imports in response to Beijing’s rare earth mineral export restrictions. The announcement triggered a sharp crypto sell-off, with Bitcoin (BTC) and Ether (ETH) tumbling over 10% as traders liquidated nearly $20 billion in leveraged positions. Smaller tokens saw deeper declines amid forced selling, pushing total crypto market capitalization down to $3.75 trillion. The tariff threat also sent gold to fresh highs, underscoring cryptocurrencies’ status as risk assets. Beyond price impacts, China’s rare earth controls—vital for electronics and mining hardware—are set to raise semiconductor and mining costs, squeeze smaller miners and delay hardware upgrades. Policy experts warn the ongoing trade war may lead to tighter cross-border capital controls and fragmented payment systems, potentially driving demand for blockchain-based alternatives. Institutions are repricing geopolitical risk, reshaping capital flows and increasing market volatility.
Bearish
The ongoing trade war and tariff threat have directly undermined crypto market sentiment, triggering immediate sell-offs and increased volatility. In the short term, mass liquidations of BTC and ETH leveraged positions amplified downward price pressure. Rare earth export controls raise mining hardware and semiconductor costs, squeezing miner margins and delaying equipment upgrades. Over the long term, persistent geopolitical tensions and the risk of tighter capital controls may erode cryptocurrency liquidity and appeal, sustaining bearish momentum unless tariffs are rolled back or supply chains are realigned.