Bitcoin Dips Below $100,000 as China Announces Retaliatory Tariffs on US Goods

Bitcoin's price dipped below the $100,000 mark on Tuesday, influenced by China's announcement of retaliatory tariffs on U.S. goods, including coal, crude oil, and agricultural machinery. The move by China's finance ministry, which will see tariffs ranging from 10% to 15% starting February 10, has added another layer of uncertainty to the global economic landscape and appears to be impacting investor sentiment in the cryptocurrency market.

Tit for Tat: China Responds to US Tariffs with New Levies

China's tariff announcement follows the implementation of new U.S. tariffs on Chinese goods, signaling an escalation in trade tensions between the two economic superpowers. "The U.S.' unilateral imposition of tariffs severely violates the rules of the World Trade Organization," the Chinese ministry stated, justifying its retaliatory measures. In a separate move, China's Ministry of Commerce also announced tighter export controls on certain products, including tungsten, tellurium, bismuth, molybdenum, and indium, citing national security interests.

Bitcoin's Price Swings: A Reflection of Global Uncertainty

Bitcoin, which had recently rebounded above $100,000 following a temporary pause in U.S. tariff threats against Mexico, experienced a pullback to around $98,500 earlier today before recovering slightly to $99,300. This volatility reflects the cryptocurrency's sensitivity to broader macroeconomic events and geopolitical tensions.

Risk Asset or Safe Haven? Bitcoin's Role in a Trade War

"While bitcoin is often discussed as a digital alternative to gold, it is still largely perceived as a risk asset by many investors," said Min Jung, research analyst at Presto Research. "As such, China's retaliatory 10% tariff on the U.S. is likely to put pressure on risk assets, including crypto, much like equities." However, Jung also suggested that the initial market reaction might have been an overreaction and that the longer-term impact will depend on whether this marks the beginning of a broader trade war.

Expert Opinions: Navigating the Trade Tensions

Justin d'Anethan, head of sales at Liquifi, echoed this sentiment, noting that while initial market jitters were tied to U.S. tariffs on Mexico and Canada, "it's becoming clear that those were just opening shots — the real escalation is happening with China, and potentially Europe next."

Nick Ruck, director of LVRG Research, warned that "an escalation into a trade war will further deepen a sell-off of crypto assets unless the U.S. can negotiate a cancellation or postponement like with Canada and Mexico."