Crypto Market Extends Losses as Tariff Tensions Rattle Investors

The cryptocurrency market posted losses for the second consecutive day on Wednesday, as investors grapple with new potential tariff measures.

Bitcoin (BTC) remained flat over the past 24 hours, trading at around $85,000, while Ethereum (ETH) is down 2% to $1,588. XRP slipped 2.2% to $2.09. Solana (SOL) also dropped by around 1.9% to $127.

The overall cryptocurrency market capitalization decreased by 2.2% to $2.75 trillion, according to CoinGecko. Over the past 24 hours, leveraged liquidations amounted to $241 million. BTC led with $47 million, followed by ETH with $40 million, according to CoinGlass.

In the exchange-traded fund (ETF) space, U.S. spot Bitcoin ETFs recorded $76 million in inflows on Tuesday, marking the second straight day of inflows following a seven–day streak of outflows, per SoSoValue data. Spot ETH ETFs recorded around $14 million in outflows.

Experts say the broader market volatility is due to President Donald Trump’s ongoing trade war with China, which has dampened investor confidence and fueled uncertainty.

US-China Tensions

Trade tensions between the US and China have been simmering for years, but escalated after President Trump announced additional tariffs on Chinese imports this year.

With the new 145% tariffs on top of the existing levies, some Chinese goods now face total tariffs of up to 245%. “This includes a 125% reciprocal tariff, a 20% tariff to address the fentanyl crisis, and Section 301 tariffs on specific goods, between 7.5% and 100%,” the White House explained on Tuesday.

“The market movements correlate with the ongoing tariff turmoil, in particular with China-US macro relations and risk assets,” said Paul Howard, Senior Director at Wincent. Howard added that this turmoil is not isolated to digital assets, leading to the appeal of gold as a safe haven and “likely why BTC hasn't fallen as much as the wider market cap.”

Dr. Kirill Kretov, a senior automation expert at CoinPanel, echoed this sentiment: “Yes, there is something behind the move, and it’s the chaos coming out of the new U.S. administration. One vague statement or policy tease is enough to rattle even traditional markets. In crypto, which is way thinner and more reactive, that kind of uncertainty hits like a sledgehammer.”

Dr. Kretov explained that we are deep in a risk-off environment thanks to geopolitical stress, shaky economies, and drained liquidity across the board. “The markets are easily pushed around right now,” he added. “These sharp 10% swings? They're not real trends, they are noise. A setup designed to shake out weak hands before the real move begins.”