Crypto Market Reacts to US-China Tariff Escalation, BTC Slides Below $99k
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Major cryptocurrencies saw a decline on Monday following the announcement of new US tariffs on some of its allies, fueling fears of a potential escalation in global trade tensions. Bitcoin dropped to a three-week low, and Ethereum hit its lowest level since September, as investors sought to exit risky assets. However, Bitcoin, the world’s largest cryptocurrency by market cap, quickly bounced back from a low of $90,000 to over $101,000 before dipping below $99,000 again.
China’s Retaliation to US Tariffs
In response to the US’s latest trade measures, China swiftly imposed tariffs on key US exports. A 10% tariff was placed on all US imports into China, effective as of 12:01 AM ET. The tariffs target sectors such as energy and agriculture, with 15% duties on coal, LNG, and 10% tariffs on crude oil and select automobiles. These measures will go into effect on February 10. China also introduced export controls on critical minerals like tungsten and ruthenium, citing national security concerns.
US, China Trade War Continues to Intensify
The trade conflict between the US and China shows no signs of easing. While President Trump temporarily suspended proposed tariffs on Mexico and Canada, offering some relief to global markets, no such leniency has been extended to China. Additionally, China launched an antitrust investigation into Google, signaling further tensions with American companies.
Altcoins Bounce Back
Altcoins also saw sharp recoveries, with XRP rising by 50%, recovering from previous losses, and Solana advancing to trade at $210. Despite cryptocurrencies remaining sensitive to macroeconomic events, the pause in tariffs on Mexico improved market sentiment and sparked renewed speculative interest in digital assets. Ethereum has also gained and is currently trading above $2700 mark.
