Bitcoin took a tumble on Friday, slipping below the $104,000 mark, as renewed tensions between the U.S. and China over tariffs sent ripples across global markets. The flagship cryptocurrency briefly touched a session low of $103,900, marking a 2.1% drop in the last 24 hours. Meanwhile, the broader crypto market, as measured by the CoinDesk 20 index, felt the pressure even more acutely, falling by 4.2%.
Crypto Markets in Turmoil
The latest developments in the ongoing U.S.-China trade saga have once again put pressure on risk assets, with smart contract platforms taking a particularly hard hit. Solana (SOL), Sui (SUI), and Avalanche (AVAX) each saw significant losses, down 6.3%, 7.8%, and 7.3% respectively. The investor anxiety was palpable, as even crypto stocks weren’t spared. Bitdeer (BTDR), a bitcoin mining firm that had enjoyed a remarkable surge of 132% from mid-April to late May, saw its stock plunge by 8.3% in just one day. Other notable crypto stocks also faltered, with MicroStrategy (MSTR) sliding 2.7% and Coinbase (COIN) shedding 1.3%.
Outside the digital assets realm, traditional markets weren’t immune. The S&P 500 and Nasdaq slipped by 1% and 1.5%, respectively, while gold—a typical safe haven in turbulent times—lost 0.7%.
Trade Tensions Reignite
The backdrop to this market turbulence is the renewed friction between Washington and Beijing. Earlier this month, an agreement had seemingly calmed the waters, but recent comments from President Donald Trump on Truth Social accusing China of “violating” the tariff deal have reignited concerns. Treasury Secretary Scott Bessent added fuel to the fire during a Fox News interview, stating that talks with Chinese counterparts had “stalled.” This echoes previous optimism when Bitcoin Traders Eye Breakout to New Highs as Trump Says Tariff Deals Progressing.
China, for its part, has called on the U.S. to “immediately correct its erroneous actions” and to stop imposing what it called discriminatory restrictions, according to a BBC report. This diplomatic back-and-forth has brought the specter of a trade war back to the forefront, unsettling markets that had rallied in May on hopes of a resolution.
A Fragile Market Recovery
The cooling of U.S.-China tensions last month had provided a much-needed boost to risk assets, with Bitcoin reaching new heights. However, this latest escalation threatens to unwind those gains. “The market is skittish,” noted economist Jamie Wilkes. “We’re seeing a classic risk-off move as investors reassess their strategies in light of these geopolitical developments.” This situation is reminiscent of when Bitcoin Jumps Above $97K as Traders Optimistic U.S.-China Trade Deal Possible.
Despite the current headwinds, some analysts remain optimistic about the long-term prospects of crypto. “While the short-term outlook is shaky, the underlying fundamentals of Bitcoin and other major cryptocurrencies remain strong,” said crypto strategist Linda Collins. “It’s a volatile market, but that’s part of the territory.”
Looking Ahead
As the situation unfolds, market participants will be closely watching for any signs of progress—or deterioration—in U.S.-China relations. The outcome will likely steer the course of both crypto and traditional markets in the coming weeks. Investors are left pondering whether this is merely a temporary setback or the beginning of a more prolonged downturn.
In the meantime, with the unpredictable nature of geopolitical events, caution seems to be the guiding principle. While the allure of digital assets continues to captivate, the market’s reaction to these macroeconomic tremors underscores the need for vigilance and adaptability. As always, the crypto world waits with bated breath for the next move in this ongoing diplomatic chess game.
Source
This article is based on: Bitcoin Slips Below $104K, Cryptos Slide as U.S.-China Tariff Tensions Flare Up
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
