Cryptocurrency markets tumbled on Friday as renewed trade tensions between the US and China, coupled with a fresh export control move by Donald Trump, rattled investors worldwide. After the announcement crypto giant Bitcoin fell 8.4% to $104,782 at 17:20 ET and Ethereum followed, tumbling 5.8% to $3,637. Earlier on Monday, Bitcoin, the world’s largest crypto, recorded its lifetime high, surpassing $126,250 levels.On Friday, the US President unveiled a 100% additional tariff on Chinese imports, bringing the total tariffs on China to 130%. Alongside, he also rolled out new export controls on critical softwares. The move comes in retaliation to China’s recent restrictions on rare earth minerals, essential for technology and manufacturing industries.Trump’s declaration triggered an immediate reaction in financial markets. The S&P 500 Index (.SPX) fell more than 2%, while cryptocurrencies tumbled. Bitcoin initially sank more than 12% after Trump’s post on Truth Social before trimming some losses. “A renewed trade war between China and the US erupted on Friday, causing uncertainty in markets and a rout in risk assets,” Ravi Doshi, co-head of markets at prime broker FalconX told Bloomberg. He further added that demand for downside protection surged through their derivatives desk during the day.$6 billion wiped out in 1 hour!The slump led to widespread liquidations across the crypto market. In just one hour, over $6 billion in positions were wiped out, the largest amount since early April. Data from Coinglass showed more than $7.4 billion in crypto bets were liquidated in the last 24 hours, including $6.7 billion in long positions and $695 million in bearish bets. Around $6.6 billion of this occurred in the four hours following Trump’s statement.Smaller tokens were hit even harder. Ether lost more than 17%, while XRP and Dogecoin plunged by more than 30%.The trade flare-up also affected other assets, dragging down stocks and oil prices, and driving investors towards the safety of US treasuries and gold, Bloomberg reported.Trump’s move followed his earlier warning on Friday, in which he criticised China’s “hostile” export controls on rare earth minerals. He also said there seemed to be “no reason” to hold his planned meeting with Chinese President Xi Jinping on the sidelines of the APEC summit in South Korea later this month.Until this point, investors had been upbeat, pouring money into stocks, bonds and cryptocurrencies. Friday’s announcement, however, abruptly reversed that mood.
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