Bitcoin’s price plunged on Tuesday to approximately $98,700 after China, the world’s second-largest economy, announced new tariffs on the United States. The move is a direct response to the U.S. imposing tariffs on Chinese goods, escalating trade tensions between the two economic powerhouses.
As of early Tuesday trading hours in the U.S., Bitcoin was priced at around $98,790. The market downturn also saw Ethereum, the second-largest cryptocurrency, drop to roughly $2,729. Other major altcoins, including XRP and Cardano, fell to $2.56 and $0.74, respectively, while meme coins like Dogecoin saw their value sink to $0.27.
Adding to the downturn, former U.S. President Donald Trump’s official meme coin also saw a sharp decline, dropping to $17.09, according to data from CoinMarketCap.
Market Volatility and Crypto Sell-Off
The ongoing market turbulence follows a global cryptocurrency sell-off that has resulted in over $2.2 billion in liquidations this week. Monday marked one of the largest single-day liquidation events in crypto history, and Tuesday’s worsening trade conflict between the U.S. and China is adding further uncertainty to financial markets.
China’s retaliatory tariffs include a 15% tax on key U.S. exports such as coal and liquefied natural gas (LNG). Additionally, oil, agricultural products, and certain vehicle imports will be subject to a 10% tariff, effective February 10. These measures are in direct response to U.S. President Donald Trump’s decision to impose a 10% tariff on Chinese goods earlier this month.
“The U.S.’s unilateral imposition of tariffs seriously violates the rules of the World Trade Organization,” China stated regarding its decision. “It is not only unhelpful in solving its own problems, but also undermines the normal economic and trade cooperation between China and the U.S.”
Implications for Global Trade and the U.S. Economy
It remains unclear whether President Trump will reconsider or temporarily halt tariffs on China following Beijing’s counteraction. On Monday, Trump made a last-minute decision to suspend proposed tariffs on Canada and Mexico, which were set to take effect on Tuesday. The move followed negotiations in which both neighboring countries agreed to address border security concerns and the fentanyl crisis—two key issues for Trump’s electoral base.
The anticipated tariffs on Mexico and Canada were expected to have a significant impact on U.S. consumers. Analysts had warned that higher tariffs could increase the cost of new vehicles by as much as $3,000, potentially straining household budgets and disrupting supply chains.
Crypto Markets React to Economic Uncertainty
The cryptocurrency market often reacts sharply to global economic instability, and the recent U.S.-China tariff conflict has intensified investor concerns. Market analysts suggest that Bitcoin and other digital assets may continue experiencing volatility as geopolitical tensions escalate.
“The uncertainty surrounding trade policies between two of the world’s largest economies is fueling market fear,” said a crypto market strategist. “We may see continued sell-offs as investors look for safer assets amid growing concerns over economic stability.”
Despite the current downturn, some industry experts believe that Bitcoin and other cryptocurrencies could benefit in the long run as investors seek alternative stores of value in an increasingly volatile global economy.
For now, the crypto market remains in flux, and all eyes are on further developments between Washington and Beijing to determine how the trade dispute will shape the economic landscape in the coming weeks.
