Crypto Markets Crash as U.S.-China Trade War Escalates: $500B Wiped Out

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The ongoing trade war between the U.S. and China is once again shaking global markets, and cryptocurrencies are feeling the heat. With both nations imposing fresh tariffs, investors are pulling back from riskier assets, leading to a sharp decline in major cryptocurrencies like Bitcoin, Ethereum, Cardano, and Solana. As a result, over the last 24 hours, crypto has wiped a $500 billion market cap. 

https://twitter.com/WuBlockchain/status/1896815231734866411

China Hits Back With Tariffs

On Tuesday, China responded to U.S. President Donald Trump Donald Trump Donald Trump is an American former president politician, businessman, and media personality, who served as the 45th president of the U.S. between 2017 to 2021. Trump earned a Bachelor of science in economics from the University of Pennsylvania in 1968. Trump won the 2016 presidential election as the Republican Party nominee against Democratic Party nominee Hillary Clinton while losing the popular vote. As president, Trump ordered a travel ban on citizens from several Muslim-majority countries, diverted military funding toward building a wall on the U.S.–Mexico border, and implemented a family separation policy. Trump has remained a prominent figure in the Republican Party and is considered a likely candidate for the 2024 presidential election President latest tariff hike by announcing a 15% duty on wheat, corn, cotton, and chicken imports from the U.S.. Additionally, a 10% tax was placed on key agricultural products like soybeans, pork, seafood, and vegetables, set to take effect on March 10.

Billionaire investor Warren Buffett criticized Trump’s new tariffs, calling them an “act of war.” According to him, Trump started a war that will eventually burden investors who will find it more difficult to stay in the market for the long term. This move came just a day after Trump doubled tariffs on Chinese imports to 20%. He also confirmed that tariffs on Mexican and Canadian goods would rise to 25%, adding more pressure to global trade and risk assets like stocks and cryptocurrencies. 

Crypto Market in Freefall

The crypto market reacted negatively to the trade tensions, with major tokens erasing recent gains. Bitcoin (BTC) dropped 2%, trading around $84,200, while Ethereum (ETH) fell 12%, hovering just above $2,000, its lowest level since 2023. Cardano (ADA), Solana (SOL), and XRP also saw sharp losses, each tumbling over 20%.

This comes after these cryptocurrencies initially rallied following Trump’s announcement of a U.S. crypto strategic reserve. The surge, which saw some tokens climb nearly 60%, was short-lived as profit-taking and broader economic fears took over.

What’s Next? 

With uncertainty looming, all eyes are now on Friday’s White House Crypto Summit, where investors hope for clearer regulations or supportive measures. Depending on the outcome, the market could either stabilize or face further turbulence.

For now, the trade war is adding more fuel to the fire, leaving crypto investors on edge as they navigate growing economic tensions.