Crypto Market Sinks $125 Billion After Trump’s New China Tariff Threat – What’s Next?

The world crypto market misplaced almost $125 billion in worth inside hours on Friday after US President Donald Trump introduced plans for a “large” enhance in tariffs on Chinese imports and canceled his upcoming assembly with President Xi Jinping.

Bitcoin and Ethereum led the decline as danger belongings bought off sharply following Trump’s remarks. 

Trump’s Trade War Fear Crashes Financial Markets

The whole crypto market capitalization dropped from round $4.27 trillion to $4.10 trillion, in accordance with CoinGecko. The transfer mirrored Wall Street’s response, the place the S&P 500 erased $1.2 trillion in worth in 40 minutes.

What simply occurred?

At 10:57 AM ET, President Trump canceled his assembly with China and stated “large” tariff will increase are coming.

40 minutes later, the S&P 500 erased -$1.2 TRILLION of market cap.

Is this dip a BUYING alternative? Let us clarify.

(a thread) pic.twitter.com/00Y8SKungk

— The Kobeissi Letter (@KobeissiLetter) October 10, 2025

Bitcoin fell 1.9% to $118,000, whereas Ethereum slid 4.7% to $4,104. Altcoins confronted heavier losses, with Solana and XRP down over 2% respectively. 

Liquidation data reveals the sell-off triggered a wave of compelled unwinding throughout exchanges. Over $824 million in leveraged positions have been liquidated up to now 24 hours, with Bitcoin accounting for the biggest liquidations.  

Long merchants took the largest hit, shedding greater than $670 million in liquidations.

Analysts stated the shock announcement revived fears of a renewed US–China trade war, including to volatility already elevated by rate cut uncertainty and slowing world progress. 

Crypto markets, which have more and more tracked equities, reacted as a part of a broader “risk-off” shift by institutional merchants.

The sell-off highlights crypto’s rising sensitivity to geopolitical and macroeconomic occasions. 

As conventional markets tumbled, digital belongings adopted carefully, reflecting tighter cross-market linkages between tokenized and conventional finance.

Some very unusual issues are occurring in China! They have gotten very hostile, and sending letters to Countries all through the World, that they need to impose Export Controls on every factor of manufacturing having to do with Rare Earths, and nearly the rest they…

— Trump Truth Social Posts On X (@TrumpTruthOnX) October 10, 2025

Will The Crypto Market Crash Further?

The crypto market ought to count on fast volatility to proceed by means of the weekend as traders process the tariff shock and liquidity stays skinny. 

Short-term sentiment will possible keep fragile for the subsequent 48–72 hours, with Bitcoin hovering near the $115,000–$118,000 vary whereas altcoins stay underneath stress.

If no new tariff measures are formally introduced, the market may start to stabilize subsequent week as danger urge for food regularly returns. 

However, a proper Executive Order or Chinese retaliation may prolong the downturn by one other one to 2 weeks. In that case, leveraged unwinding and rotation into stablecoins might intensify.

Longer time period, if commerce tensions persist into November, the sell-off may evolve right into a broader macro correction much like earlier tariff shocks in 2019 or Fed-driven pullbacks in 2022. 

Recovery would then rely upon how shortly policymakers make clear their positions and whether or not institutional merchants regain confidence in danger belongings.

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