The cryptocurrency market faced a significant downturn on Friday as renewed tensions between the U.S. and China reignited fears among investors. Bitcoin fell 2.1%, slipping below $104,000, triggering widespread losses across both digital assets and traditional markets.
The decline followed accusations from former U.S. President Donald Trump that China violated a recently agreed tariff truce.
Bitcoin and CoinDesk 20 Index Decline
Bitcoin (BTC) was last seen trading at $103,879.74, having briefly touched a session low of $103,900. This marks a 2.1% drop in the last 24 hours. The broader CoinDesk 20 Index—which tracks top cryptocurrencies excluding stablecoins and memecoins—fell 4.2%, reflecting a more widespread correction in the digital asset space.
Smart Contract Platforms Take a Bigger Hit
Leading smart contract platforms were hit harder by the selloff. Among the top losers:
- Solana (SOL) fell 6.3%, trading at $155.08
- Sui (SUI) dropped 7.8%, trading at $3.15
- Avalanche (AVAX) declined 7.3%, priced at $20.31
These platforms, often associated with high-growth potential, were heavily impacted as risk sentiment faded.
Crypto Stocks and Broader Markets Also Fall
Not only crypto assets but crypto-related stocks were affected:
- Bitdeer (BTDR) dropped 8.3%, after a massive rally of 132% between April 16 and May 21
- MicroStrategy (MSTR) slid 2.7%
- Coinbase (COIN) fell 1.3%
The losses extended to broader markets, with the S&P 500 down 1% and Nasdaq falling 1.5%. Gold also lost 0.7%, highlighting a general move away from risk assets.
Trade War Fears Return
The market jitters were caused by new friction in U.S.-China trade relations. Tensions escalated when Trump accused China of breaching the tariff agreement, calling them out on social media. Meanwhile, U.S. Treasury officials confirmed that trade talks with Chinese representatives had stalled.
China responded by urging the U.S. to reverse “discriminatory restrictions,” signaling a potential return to trade conflict.
Conclusion: Uncertainty Dampens Risk Appetite
The May market rally, fueled by a brief cooling of geopolitical tensions, helped Bitcoin reach new highs. However, with the return of trade hostilities, there’s growing concern that recent gains across crypto and equities could be reversed if the situation worsens.
Investors are now watching for further developments, as global risk sentiment remains fragile.