- Bitcoin fell to $111,000, and the total crypto market dropped 4% to $3.75 trillion after the U.S. and China imposed new tariffs on each other.
- Both countries expanded their trade war to include shipping fees and consumer goods, triggering mass selloffs in cryptocurrency markets.
- Major investors are taking short positions, and ETFs recorded over $750 million in combined outflows from Bitcoin and Ethereum.
The crypto market has suffered steep losses as escalating trade tensions between the United States and China trigger widespread investor panic. Bitcoin has dropped to approximately $111,000, while the total cryptocurrency market capitalization has fallen nearly 4% to $3.75 trillion within a single day.
The downturn began after President Trump proposed a 100% tariff on Chinese imports, set to take effect on November 1, 2025. Markets briefly recovered during late Sunday trading but resumed their decline as geopolitical tensions intensified.
New Tariffs Target Shipping and Consumer Goods
On Tuesday, October 14, both nations expanded their economic conflict into the maritime sector. China announced it would impose “special charges” on vessels built, owned, or operated by U.S. entities while exempting domestic ships from these fees. The United States responded by implementing tariffs on imported timber, furniture, and kitchen cabinets, which are heavily sourced from China.
China’s Ministry of Commerce issued a stern warning, stating it “will fight to the end if the U.S. wants a trade war.” The ministry added that negotiations remain possible, noting “if there’s a talk, the door remains open.” These statements failed to ease market concerns. Traders now anticipate prolonged economic friction between the world’s two largest economies.
Market analyst Ted Pillows directly linked the current slump to Beijing’s retaliatory measures. Experts suggest the early October gains prompted significant profit-taking once trade hostilities resumed.
🇨🇳🇺🇸 China says it will "fight to the end" if US wants a trade war.
"If you wish to negotiate, our door remains open."
Today's dump is because of this.
Uncertainty. Trump needs to end this.
Clarity = pump.
— Ted (@TedPillows) October 14, 2025
Fear Dominates Investor Sentiment
The Bitcoin Fear & Greed Index has entered “Fear” territory, reflecting growing anxiety among market participants. Glassnode data reveals that funding rates in derivatives markets have hit their lowest levels since the 2022 bear market.
Source: TradingView
Ethereum has experienced substantial losses alongside Bitcoin. Spot ETFs for both assets recorded massive outflows. Ethereum ETFs saw $429 million in net withdrawals on October 13, marking the third consecutive day of capital flight. Bitcoin ETFs lost $327 million during the same period.
Source: SoSoValue
A prominent trader known as the Trump Insider Whale has expanded their short position to $340 million. This investor previously shorted $700 million in Bitcoin and $350 million in Ethereum, generating over $200 million in profits. The renewed bearish bet signals potential for additional price corrections.
Santiment analysts emphasize that the trajectory of U.S.-China trade negotiations will likely determine whether markets stabilize or continue falling. The outcome of diplomatic efforts could either restore confidence or deepen the current crisis.
Despite the sharp decline, some market experts maintain that the correction may prove temporary. Historical patterns suggest similar selloffs have created buying opportunities once volatility subsides. Whether this downturn follows that precedent depends largely on how quickly geopolitical tensions ease and whether institutional investors return to the market.
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