The trade war that once rattled global markets has returned, and Bitcoin is part of the battlefield this time.

On Oct. 15, President Donald Trump declared that the United States was now in a trade war with China, saying:

“We’re in a [trade war] now. We have 100% tariffs. If we didn’t have tariffs, we would have no defense. They’ve used tariffs on us.”

This confirmation cements a week of tension after he threatened to slap 100% tariffs on Chinese imports.

Notably, that threat had signaled the start of a monetary standoff with ripple effects reaching deep into global markets.

As a result, traditional equities tumbled, while digital assets erased roughly $20 billion in open interest within 24 hours.

Data from CoinGlass shows that Bitcoin and Ethereum led the decline, extending what had already been one of the rare “red Octobers” for the top cryptocurrencies.

How does this impact Bitcoin?

Tariffs work like a stealth tax, making imports more expensive, raising input costs, stoking inflation, and pressuring central banks to keep interest rates higher for longer. That combination often drains liquidity from risk assets like Bitcoin.

In 2018, similar tariff announcements triggered waves of volatility that pushed Bitcoin below $6,000. The pattern is repeating in 2025.

Institutional investors are gradually shifting toward defensive positions in gold, Treasury bills, and short-duration bonds.

On the other hand, Bitcoin, which still trades like a high-beta macro asset, becomes collateral damage in that flight to safety.

Yet, the situation now carries an added layer of complexity.

Unlike the 2018 cycle, Bitcoin is no longer a retail-driven instrument but a regulated asset class with deep ETF exposure and transparent derivatives markets.

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Author: Oluwapelumi Adejumo