Bitcoin’s recent surge was abruptly halted as heightened trade tensions between the United States and China triggered a swift pullback in the cryptocurrency market on Friday.
After reaching an all-time high earlier in the week, bitcoin (BTC) faced renewed selling pressure following a statement by U.S. President Donald Trump. In a Truth Social post, Trump announced plans for a “massive increase” in tariffs on Chinese imports as a response to China’s new export controls on rare earth metals.
The announcement prompted an immediate reaction across digital asset markets. Bitcoin quickly slid from around $122,000 to below $119,000 in late-morning trading, signaling a sharp reversal. Other major cryptocurrencies, including ether (ETH), solana (SOL), and XRP, mirrored this downward trend with notable declines.
The fallout extended beyond crypto tokens, impacting publicly traded companies closely linked to the sector. Shares of Circle (CRCL) dropped over 6%, while Robinhood (HOOD), which derives significant revenue from cryptocurrency trading, declined by approximately 5%. Coinbase (COIN) and MicroStrategy (MSTR) also saw their stock prices fall by around 5% and 3%, respectively.
The ripple effects reached traditional financial markets. West Texas Intermediate (WTI) crude oil prices fell nearly 4% to below $60 per barrel, marking their lowest level since early May. Key U.S. equity benchmarks followed suit, with the S&P 500 decreasing 1.6% and the Nasdaq Composite down 1.3%.
In contrast, gold prices climbed, gaining more than 1% to surpass $4,000 per ounce. This rise reinforced gold’s standing as the preferred safe-haven asset amid mounting geopolitical and economic uncertainties, overshadowing bitcoin’s role as a risk-off investment.
Currently, bitcoin is trading near $118,800, reflecting a roughly 2% decline over the past 24 hours. Since peaking above $126,000 just four days ago, it has contracted by nearly 6%, illustrating the market’s sensitivity to international trade developments.
As global trade relations remain tense, investors across both cryptocurrency and conventional markets are responding with caution, underscoring the broader interconnectedness of financial assets with geopolitical events.
