The bitcoin price dropped to the $118,000s range today after President Trump announced plans to raise tariffs on Chinese goods in response to China’s export controls on rare earth metals.
Bitcoin price is down roughly 2.3% in the past 24 hours and about 6% since reaching a record high above $126,000 just four days ago.
President Trump threatened a “massive” increase in tariffs on Chinese goods, signaling a sharp escalation in the U.S.-China trade tensions and casting doubt on a planned APEC meeting with President Xi. This came after China imposed new limits on rare earth and related technology trade.
“I was to meet President Xi in two weeks, at APEC, in South Korea, but now there seems to be no reason to do so,” Trump said on Truth Social.
China requires foreign companies to obtain special approval to export products containing even trace amounts of Chinese rare earth elements, which are essential for items ranging from jet engines and electric vehicles to laptops and phones.
Trade talks between China and the U.S. this year have addressed rare earths, TikTok, and tariffs, with over three rounds held so far. Following May talks in Geneva, the U.S. said China had agreed to ease some of its rare earth export restrictions.
All markets reacted negatively, echoing the sentiment from April when President Trump’s ‘Liberation Day’ tariffs rattled markets. The tariffs in April, via Executive Order 14257, declared a trade deficit emergency, imposing sweeping U.S. import duties.
Bitcoin price reaction
Bitcoin kicked off October with a surge, reaching all-time highs above $126,000 in the first week. In the past few days, the price had pulled back to the $121,000 range.
Some analysts point to signs 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 euphoria phase may carry it toward the $180,000–$200,000 zone before sentiment shifts.
Bitcoin has surged more than 30% since the start of the year, buoyed 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.
Crypto-related stocks, like Circle (CRCL), Robinhood (HOOD), Coinbase (COIN), and MicroStrategy (MSTR), declined 3%-6% at times throughout the day.
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