Trump’s Trade War Bombshell Rattles Crypto Investors Worldwide – Details

US President Donald Trump said the US is already “in” a trade war with China, and his comments have sent shock waves through crypto and financial markets.

Reports say he threatened steep tariffs — including a 100% tariff on Chinese imports — after Beijing tightened controls on rare earths and related technology exports. Traders moved fast. Prices fell. Volatility spiked.

Crypto Markets React To Tariff Threats

According to Reuters and market reports, Bitcoin and Ether both dropped as investors rushed to reduce risk. Based on reports, close to $20 billion in leveraged crypto positions were liquidated within a 24-hour window.

Many smaller tokens plunged even more, driven by thin order books and forced selling. Stock markets fell too, and some firms accelerated shipments to beat possible tariff dates. The mood turned cautious almost overnight.

Crypto Seen As Risk Asset

Reports have disclosed that the idea of crypto as a safe haven has taken a hit. Under the stress of rising geopolitical tension, digital assets have behaved more like stocks than gold.

Gold itself rallied and reached fresh highs as traders sought traditional safe havens while crypto investors chased liquidity. Analysts say that when global risk rises quickly, holders of risky assets tend to sell first — and that has folded crypto into the wider “risk off” reaction.

China’s export controls on rare earth minerals matter to crypto beyond headlines. Rare earths and chipmaking are crucial for electronics and for mining rigs.

Based on trade reporting, any prolonged curbs or tariffs could raise the cost of semiconductors and other parts used in mining hardware and data centers.

Higher input prices would push some smaller miners to the sidelines, and could slow planned hardware upgrades that support networks.

According to policy briefings and financial commentary, the political fight may bring new rules. If trade measures harden, regulators in several countries could tighten oversight of cross-border flows and exchanges out of concern for national security and financial stability.

At the same time, fragmentation of payments and finance between blocs could create both risks and openings for alternative payment rails built on blockchain. Capital flows may shift quickly as institutions reprice geopolitical risk and reallocate holdings.

Featured image from Getty Images, chart from TradingView