Bitcoin's price continued its losses on Saturday, falling another 2.3% after sharp declines in technology stocks and riskier assets as trade tensions between the United States and China escalated dramatically.
President Donald Trump announced late Friday that the United States will impose new 100% tariffs on all Chinese imports starting November 1, in addition to the effective tariff rate, which analysts said is already 40%.
Trump also said Washington would impose export controls on any and all critical software on the same date, marking one of the most sweeping trade escalations since the start of the US-China trade dispute.
This move comes after Beijing's decision to tighten restrictions on exports of rare earths, which are critical inputs for the automotive, semiconductor, and defense industries.
China controls about 70% of the global supply of rare earths, making it a critical chokepoint in technology supply chains.
Trump said China had taken an exceptionally aggressive stance and hinted that he might cancel a planned meeting with President Xi Jinping at the upcoming APEC summit in South Korea.
Stocks collapse as traders brace for further escalation
Financial markets reacted quickly. US stocks reversed early gains and accelerated their declines to close on Friday, with the Dow Jones Industrial Average falling 1.9% and the S&P 500 losing 2.71%, the largest one-day drop since April 10.
The NASDAQ Composite, which hit a record intraday high earlier in the session, finished down 3.56% as technology stocks bore the brunt of the selloff.
Analysts cited concerns that rare earth restrictions could disrupt the production plans of major US tech companies. Wall Street's fear index, the CBOE Volatility Index, rose above 22.
After a relatively calm few months and improving relations between the US and China, this escalation in tensions has created a terrifying moment for markets, with technology stocks under significant pressure today, said Wedbush analyst Dan Ives.
However, Ives maintained a constructive outlook for the sector despite the collapse, saying the bark will likely be worse than the bite this time as calmer minds prevail.
He said he still sees pullbacks like these as buying opportunities in semiconductors, software, and big tech companies.
Sell-offs like today encourage investors to buy the winners in technology and not rush to the elevators despite this war of words between Trump and Xi, Ives concluded.
Bitcoin continues its losses on Saturday.
Risk aversion extended to digital assets. Bitcoin, which had fallen sharply in late Friday trading, fell 2.35% to trade at $110,745.0000 by 11:18 a.m. Saudi time on Saturday. Ethereum fell 0.9% on the day after losing 12.2% on Friday.
The cryptocurrency has fallen by more than 10% in the past 24 hours, while major tokens including XRP and Solana have fallen between 15% and 30%.
The digital asset sector was affected by the broader risk aversion following Trump's remarks, with concerns that a prolonged trade conflict could tighten global liquidity conditions and limit speculative investment flows.
