• President Donald Trump is planning a fresh tariff increase on China.
• Bitcoin dived 10% following the announcement amid a broader decline in the crypto market.
• Stocks also joined in the decline, with the S&P 500 dropping 2.7% points on the day.

Bitcoin (BTC) briefly declined nearly 10% on Friday as the crypto market took a sharp downturn following US President Donald Trump's plan to raise tariffs on Chinese goods.

Trump tariff threat on China sparks weekend decline in Bitcoin, crypto market

The crypto market took a sharp dive on Friday, erasing nearly $280 billion from its market cap.

The downturn stems from President Donald Trump's announcement that the US is planning a 100% increase in levies on Chinese imports beginning November 1.

"One of the policies that we are calculating at this moment is a massive increase of tariffs on Chinese products coming into the United States of America," wrote Trump in a Truth Social post on Friday.

Trump described China as "hostile" and accused it of trying to dominate the market by imposing export controls on rare-earth metals. In line with this, he stated that a range of additional countermeasures is also under serious consideration, suggesting that further actions could be taken in response to China's policies.

The announcement stirred a decline among top crypto assets, with Bitcoin briefly falling over 10% below the $108,000 level over the past 24 hours.

BTC/USDT daily chart

A sharp pullback was also observed among altcoins, with Ethereum (ETH), XRP and Solana (SOL) dropping 18%, 32% and 20%, to $3,540, $1.87, and $174, respectively. 

Several other sectors saw similar downturns, with the memecoin category plunging 35% and the Artificial Intelligence (AI) sector dropping 30%.

The wave of negative reactions sparked heavy long liquidations on Friday, with the Coinglass liquidation data platform crashing briefly.

This marks one of the steepest single-day declines in the crypto market in 2025.

Prior to the decline, a key Bitcoin OG wallet opened $1.1 billion short positions on BTC and ETH, resulting in unrealized profits of over $27 million, according to data compiled by smart money tracker Lookonchain.

A broader decline was observed across other risk assets, with stocks seeing a rapid pullback. The S&P 500 fell 2.7%, dropping 182 points on the day. The Dow Jones indices also fell 878 points, dropping 1.9% following the announcement.

This isn't the first time that a Trump tariff threat has sparked a decline in the crypto market. A similar event occurred in April after the US President announced the Liberation Day tariffs.

Another market plunge occurred in August following the US reciprocal tariff announcement for trade partners across the globe.

Market experts predict that the impact of new tariffs on China could quench the positive momentum that crypto assets have maintained since the start of October.