Two major cryptocurrencies have crashed after Donald Trump imposed 100 per cent tariffs on “any and all critical software” from China, as trade tensions continue to escalate between the two countries.
Bitcoin and Ethereum both saw record liquidations as investors reacted to fears over a trade war, which saw many crypto investors move their money to stablecoins or safer assets.
In the last 24 hours, Bloomberg reports that bets worth more than $19bn have been wiped out, with Trump’s announcement on X sparking a decline of more than 12 per cent in Bitcoin.
In a post to his Truth Social platform on Friday, the US president said Beijing had sent an “extremely hostile letter to the world”, and imposed “large-scale export controls on virtually every product they make”.
The president added that he was imposing the tariffs because of export controls placed on rare earths by China.
He wrote: “Based on the fact that China has taken this unprecedented position, and speaking only for the USA, and not other nations who were similarly threatened, starting November 1st, 2025 (or sooner, depending on any further actions or changes taken by China), the United States of America will impose a tariff of 100% on China, over and above any tariff that they are currently paying.
“It is impossible to believe that China would have taken such an action, but they have, and the rest is history. Thank you for your attention to this matter!”
China’s Ministry of Commerce announced on Thursday that overseas exporters need to get an export license for items that contain more than 0.1 per cent of rare earths from China or are manufactured using the country’s rare earth extraction or refining technology to “safeguard national security and interests”.
In retaliation, Trump said that Washington’s relationship with Beijing had been “very good” over the last six months, “thereby making this move on Trade an even more surprising one”.
He also said that he had been due to meet with the Chinese president Xi Jinping in two weeks on the sidelines of the Asia-Pacific Economic Cooperation summit in South Korea, “but now there seems to be no reason to do so”.
As a result of the news, the price of Bitcoin fell by more than 10 per cent to below $110,000, before recovering to $113,096 on Saturday morning.
The value of Ethereum slumped by 11.2 per cent to $3,878.
Other cryptocurrencies, including XRP, Doge and Ada, fell around 19 per cent, 27 per cent, and 25 per cent in the last 24 hours, respectively.
Stocks on Wall Street had also tumbled, recording their biggest single-day losses since April.
The S&P 500 dropped 2.71 per cent, while the Dow Jones Industrial Average dipped about 878 points and the Nasdaq Composite slid 3.58 per cent by the Wall Street closing bell at 4pm ET Friday.
