Bitcoin Drops Amid Tariff Uncertainty, China Mulls Crypto Rules

Bitcoin Declines as Tariff Uncertainty Weighs on Markets

Bitcoin prices dropped 2.1% to $83,811.0 on Wednesday, reversing earlier gains as investors sought clarity on U.S. President Donald Trump’s fluctuating tariff policies. The cryptocurrency had briefly surged to $86,000 on Tuesday but failed to maintain momentum amid heightened risk aversion.

Tariff Policy Uncertainty Impacts Risk Appetite

Trump’s unpredictable trade stance, including potential exemptions for certain tariffs and new duties on semiconductors and pharmaceuticals, has rattled global markets. Meanwhile, Chinese goods face cumulative tariffs of 145%, prompting a 125% retaliatory response from China. This escalating trade tension has dampened enthusiasm for speculative assets like cryptocurrencies.

Bitcoin Loses Safe-Haven Appeal

Bitcoin, often seen as a hedge during geopolitical uncertainty, is losing its safe-haven appeal as mixed signals from Washington confuse investors. Gold, a traditional safe-haven asset, reached a record high on Wednesday, reflecting a shift to more traditional risk-off strategies.

China Explores Crypto Disposal Rules

China is considering new regulations for managing seized cryptocurrencies amid a growing stockpile of tokens from criminal cases. With crypto trading banned on the mainland, authorities are turning to private firms for asset liquidation, but clearer oversight is now being demanded. China’s holdings, estimated at $1.4 billion in Bitcoin, make it one of the world’s largest crypto holders.

Altcoins See Steeper Declines

Most altcoins experienced sharper drops than Bitcoin, with Ethereum falling 4% to $1,570, XRP sliding 4.6% to $2.07, and Solana declining 6.5%. Meme tokens like Dogecoin and $TRUMP also saw losses of 4.7% and 3.4%, respectively.

The broader cryptocurrency market continues to face headwinds as global economic uncertainty and regulatory developments weigh on investor sentiment.