Bitcoin Crashes to $110K as US-China Trade War Escalates, $500B Wiped from Crypto Markets

Bitcoin plunged on Tuesday, cutting short its recent rally as fears of a renewed U.S.-China trade war rattled global markets and drove investors into traditional safe havens like gold.

The sharp selloff followed President Donald Trump’s announcement of 100% tariffs on Chinese imports, a move that wiped out nearly $500 billion in total crypto market value within days.

After soaring to a record high of $126,000 last week, Bitcoin dropped 4% to $110,770 by 09:25 ET (13:25 GMT). Over the weekend, the world’s largest cryptocurrency briefly slumped to $103,800, before staging a rebound to $115,000 on Monday that quickly faded amid deteriorating trade relations.

Trade War Fallout Hits Crypto Hard

Beijing responded firmly on Tuesday, vowing to “fight to the end” against Washington’s measures while accusing the U.S. of discriminatory trade practices. The standoff has cast doubt on an earlier framework deal and fueled uncertainty across global markets.

China’s newly imposed rare earth export controls—a move seen as critical to the tech and defense sectors—have further strained ties. While Chinese officials confirmed that low-level talks with the U.S. are ongoing, they signaled little willingness to back down.

$500B Crypto Wipeout & Market Volatility

The escalating tensions triggered widespread forced liquidations in the crypto space. Citigroup analysts noted that Bitcoin’s sharp plunge—at one point losing 13% in under an hour to nearly $102,000—highlighted its growing correlation with equity markets.

The crash resulted in over $20 billion in derivatives liquidations, yet some resilience was noted in Bitcoin ETFs, where inflows have remained steady, suggesting long-term investors are entering with less leverage than in past cycles.

Still, Citi warned that if global equity markets weaken further, Bitcoin could face additional downside pressure despite ETF demand.

Altcoins Follow Bitcoin’s Downtrend

The selloff wasn’t limited to Bitcoin. The broader crypto market also struggled:

• Ethereum (ETH) slid 3.8% to $3,943.91, after dipping below $3,400 over the weekend.

• XRP tumbled nearly 6%, trading under $2.40.

• Cardano (ADA) dropped 5.5%, while Dogecoin (DOGE) fell 5.1%.

• Solana (SOL) managed a slight gain, though momentum remained weak.

• Memecoin $TRUMP lost 2.5%.

Outlook: Volatility Here to Stay

Alongside trade tensions, doubts over corporate treasury strategies involving Bitcoin are adding pressure. For now, Bitcoin remains under heavy selling pressure, with its ability to recover hinging on geopolitical stability and broader market sentiment.