On October 10, President Donald Trump said he would impose a “massive increase” in tariffs on Chinese imports. The announcement came after Beijing introduced new restrictions on exports of rare earth materials critical to defense technology and manufacturing.
Summary
- Trump promised a “massive” increase in tariffs on China, reviving fears of a trade war; markets changed risk aversion.
- BTC fell below $117,000; ETH surpassed $4,000; SOL is approaching $200. Cryptocurrency stocks fell 5% to 10%.
- SEC actions slowed amid a 10-day shutdown, delaying cryptocurrency filings.
Trump’s statement reminded the market of April 2, when his “Liberation Day” tariff announcement spooked markets. On Friday he renewed these concerns, hinting at a trade war between the United States and China and fueling volatility in global markets.
Bitcoin (btc) immediately fell below $119,000 after hitting all-time highs earlier in the week and is now trading below $117,000. Ethereum (ETH) just broke below $4,000 while the $200 level for Solana (SUN) could soon be tested.
Cryptocurrency-related stocks such as Coinbase, Robinhood and MicroStrategy fell 5% to 10% as digital assets and technology stocks sold off simultaneously.
US stock indices fell immediately after the comments. The S&P 500 closed down 2.71% and the Dow Jones Industrial Average lost almost 900 points. The Nasdaq Composite fell the most with a daily loss of 3.56%.
Gold is up more than 1% on the day, indicating that it is indeed the only flight to safety, not cryptocurrencies.
Closure and regulatory delays
The liquidation came as the US government shutdown entered its 10th day, leaving agencies such as the Securities and Exchange Commission operating with limited staff. The SEC confirmed on October 10 that most normal review and approval processes, including pending cryptocurrency-related filings, remain delayed until funding resumes.
Friday’s session saw a broad shift in risk aversion following Trump’s tariff threat and the current fiscal impasse in Washington. Gold prices rose more than 1% while oil fell to a five-month low. The combination of trade tensions, political uncertainty and little regulatory activity contributed to the decline of traditional and digital markets throughout the day.
