Bitcoin prices fell to the $118,000 range today after President Trump announced plans to increase tariffs on Chinese goods in response to China’s export restrictions on rare earth metals.
Bitcoin prices have fallen about 2.3% in the past 24 hours, and are down about 6% since hitting an all-time high of more than $126,000 just four days ago.
President Trump has threatened to “substantially” increase tariffs on Chinese goods, signaled a sharp escalation in U.S.-China trade tensions, and cast doubt on his planned APEC talks with President Xi Jinping. This comes after China imposed new restrictions on trade in rare earths and related technologies.
“I was scheduled to meet with President Xi at APEC in South Korea in two weeks, but there doesn’t seem to be any reason to do that now,” Trump said on Truth Social.
China requires foreign companies to obtain special approval to export products containing even traces of Chinese rare earth elements, which are essential in items from jet engines and electric cars to laptops and mobile phones.
This year’s trade talks between China and the United States have covered rare earths, TikTok, tariffs and more, and more than three rounds have been held so far. Following talks in Geneva in May, the United States announced that China had agreed to ease some rare earth export restrictions.
All markets reacted negatively, echoing sentiment from April when President Trump’s “Emancipation Day” tariffs roiled markets. The April tariffs under Executive Order 14257 declared a trade deficit emergency and imposed significant import duties on the United States.
Bitcoin price reaction
Bitcoin started off with a sharp rally in October, reaching an all-time high of over $126,000 in the first week. Over the past few days, prices have rebounded to the $121,000 range.
Some analysts are pointing to signs that the Bitcoin market has entered what many describe as the “euphoric phase” of the current bull cycle.
If historical patterns hold, Bitcoin could head towards the $180,000-$200,000 zone before sentiment changes during its current stage of euphoria.
Bitcoin has soared more than 30% since the beginning of the year, buoyed by sustained inflows into U.S.-listed Bitcoin exchange-traded funds (ETFs), a return to investor confidence in digital assets, and expectations that the Federal Reserve will move to cut interest rates.
Cryptocurrency stocks such as Circle (CRCL), Robinhood (HOOD), Coinbase (COIN), and MicroStrategy (MSTR) were down 3% to 6% at times throughout the day.
