In a sudden escalation of trade tensions between the U.S. and China, the Chinese government announced on April 9 that it will impose a dramatic increase in tariffs on U.S. imports, raising them from 34% to 84%.
Bitcoin experienced a sharp drop in value following the announcement, falling below the critical $76,000 mark. This latest retaliatory move from China comes in response to recent actions by the U.S., which imposed 104% tariffs on Chinese goods on April 9 after announcing the move April 8.
Bitcoin and other major cryptocurrencies had initially shown positive momentum, with early gains hinting at a potential rally. However, as news of China’s retaliatory tariffs spread, market sentiment soured, and fears of a prolonged trade conflict led to a reversal in the cryptocurrency market.
The announcement of these new tariffs has sent shockwaves through global markets, triggering a sell-off in various asset classes.
“The Trump administration has been really amazing for crypto innovation in the United States so far, with the new SEC dropping cases, a stablecoin bill rushing through Congress and the recent disband of the Biden anti-crypto task force. We’ve gone from operation chokepoint 2.0 to open season for crypto builders overnight,” said Greenspan.
“The current Trade War has caused volatility across the board, and we can clearly see the remarkable difference between the likes of Bitcoin, which is down 30% from the peak, to some of the more risky cryptos that have been completely pulverized,” Quantum Economics founder and analyst Mati Greenspan told CryptoNews.
“For those who believe that Trump’s strategy of shaking the markets is one of short term pain for long term gain, this is an excellent time to invest on solid fundamentals,” said Greenspan.
As the U.S.-China trade war continues to evolve, both traditional and digital markets will likely remain volatile.
The drop below $76,000 shows a considerable retreat from Bitcoin’s recent highs, highlighting the fragility of the market..