Cryptocurrency Market Continues Decline Amid Geopolitical Tensions and Tariff Shock
The cryptocurrency market witnessed a sharp decline for the second consecutive day on October 12, 2025, as geopolitical shockwaves stemming from United States President Donald Trump's announcement of additional 100 percent tariffs on China sent markets reeling. The world's largest cryptocurrency, Bitcoin, alongside major digital assets like Ethereum, fell amid fears of an escalating trade war and restrictions on US software exports to China.
Market Overview and Key Metrics
According to CoinMarketCap data, global crypto market capitalization dropped from a recent record high of $4 trillion last week to $3.7 trillion, signaling a significant market contraction. Trading volumes also saw a notable decline, standing at $250.02 billion as of the latest data.
At 11:11 am on October 12, Bitcoin was trading at approximately $111,660.41, while Ethereum was priced around $3,817.26. Other major tokens like Binance Coin and XRP traded at $1,140.34 and $2.37 respectively. Despite these high values, both Bitcoin and Ethereum were down – Bitcoin by about 1 percent over the past 24 hours and Ethereum by 0.39 percent.
The broader crypto market extended its seven-day decline to 11.5 percent, with a 0.89 percent drop noted in the last 24 hours alone. This has been marked as the worst day for cryptocurrencies since the first quarter of 2025.
Causes Behind the Decline
The primary catalyst for the market downturn is the Trump's administration's imposition of new tariffs specifically targeting China, effectively doubling previous tariffs to 100 percent. Moreover, restrictions on software exports from the US to China have raised significant concerns among investors about the onset of a prolonged trade war.
This geopolitical tension caused widespread uncertainty, prompting a sell-off in both equity and crypto markets as traders sought refuge in safer assets such as gold and silver. Following the tariff announcement, the crypto market experienced a massive $19 billion liquidation on October 11, as investors hurried to exit risky positions.
Open interest, a metric that indicates the number of outstanding derivative contracts, dropped by 18 percent, reflecting a cautious stance among traders and a low appetite for continuing risky crypto investments under current conditions.
Outlook and Key Levels to Watch
Analysts at CoinMarketCap urged market participants to closely monitor Bitcoin’s ability to hold above the critical support level of $110,000. They also highlighted the importance of observing whether inflows into Bitcoin ETFs would resume following the current selloff phase.
Ethereum’s market cap stood at around $458 billion, with trading volumes halving to $54.44 billion in the last 24 hours, further underscoring the broad-based nature of the downturn.
Conclusion
The cryptocurrency market’s recent decline underscores the vulnerability of digital assets to macroeconomic shocks and geopolitical risks in the ever-evolving global trade landscape. The combination of extreme leverage and geopolitical uncertainty has created one of the most volatile episodes for cryptocurrencies in 2025. Market watchers and investors will now be keenly watching for signs of stabilization or further weakness in this high-stakes environment.