Tariff Tensions Slam Crypto Market as Bitcoin Slides, Yuan Sinks

The crypto market stumbled on Tuesday, caught in the crossfire of escalating U.S.-China trade tensions and a weakening Chinese yuan.

After briefly reclaiming the $80,000 mark, bitcoin (BTC) fell sharply to $76,500 before finding some footing just below $78,000. Ether (ETH) followed suit, dropping nearly 4% and slipping under $1,500. The broader market wasn’t spared either, with the CoinDesk 20 Index down 2.2%.

The retreat coincided with a selloff in crypto equities. Bitdeer (BTDR) tumbled 8.7%, MicroStrategy (MSTR) lost 5.3%, and Coinbase (COIN) dipped 2.3%. One exception was DeFi Technologies (DEFTF), which surged over 10% amid speculation it could soon list on Nasdaq like Galaxy Digital (GLXY).

The reversal in market sentiment came after the White House confirmed a massive 104% tariff hike on Chinese imports set to take effect at midnight. Stocks, which had started the day strong, reversed gains with the S&P 500 and Nasdaq closing down 0.5% and 0.7%, respectively.

Adding fuel to the fire, the offshore Chinese yuan (CNH) depreciated sharply to 7.4 against the dollar — its weakest level in years. Analysts believe Beijing may let the currency slide further to cushion the blow of tariffs, a move that could drive capital outflows into alternative assets like bitcoin.

“This is the playbook we’ve seen before,” said Arthur Hayes. “In 2013 and 2015, yuan weakness fueled BTC demand — and we’re setting up for a similar pattern now.”

Kirill Kretov, founder of CoinPanel, echoed that sentiment: “We’re in a storm of geopolitical uncertainty, with limited liquidity and skittish investors. This environment is ripe for high volatility but low conviction. Don’t expect a clean breakout until the macro picture clears up.”

As tensions rise and markets wobble, traders are once again looking at bitcoin not just as a risky asset, but as a hedge in times of uncertainty — especially when the yuan moves.