The price of bitcoin fell to around $118,000 today after President Trump announced plans to raise tariffs on Chinese goods in response to controls on Chinese exports of rare earth metals.
The price of Bitcoin has fallen about 2.3% in the past 24 hours and about 6% since reaching a record high above $126,000 just four days ago.
President Trump has threatened a “massive” increase in tariffs on Chinese goods, signaling a sharp escalation in US-China trade tensions and casting doubt on a planned APEC meeting with President Xi. This came after China imposed new curbs on trade in rare earths and related technologies.
“I was supposed to meet with President Xi in two weeks, at APEC, in South Korea, but now there seems to be no reason to do so,” Trump told Truth Social.
China requires foreign companies to get special approval to export products containing even trace amounts of Chinese rare earth elements, essential for items ranging from jet engines and electric vehicles to laptops and phones.
Trade talks between China and the United States this year have covered rare earths, TikTok and tariffs, with more than three rounds held so far. After May talks in Geneva, the United States said China agreed to ease some of its restrictions on the export of rare earths.
All markets reacted negatively, echoing the sentiment of April, when President Trump’s “Deliverance Day” tariffs rattled the markets. The April tariffs, via Executive Order 14257, declared a trade deficit emergency, imposing large tariffs on U.S. imports.
Bitcoin price reaction
Bitcoin started October with a surge, reaching an all-time high above $126,000 in its first week. In recent days, the price had returned to the $121,000 range.
Some analysts are reporting that the bitcoin market has entered what many describe as the “euphoria phase” of the current bull cycle.
If the historical pattern holds, bitcoin’s current phase of euphoria could take it towards the $180,000-$200,000 zone before sentiment changes.
Bitcoin has risen more than 30% since the start of the year, supported by sustained inflows into U.S.-listed Bitcoin exchange-traded funds, renewed investor confidence in digital assets and expectations that the Federal Reserve will move toward cutting interest rates.
Cryptocurrency-related stocks, such as Circle (CRCL), Robinhood (HOOD), Coinbase (COIN), and MicroStrategy (MSTR), fell at times 3%-6% throughout the day.
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