Bitcoin Crashes to $114K Amid Geopolitical Tensions
At the same time, the White House initiated mass federal employee layoffs amid the partial government shutdown.
Quick overview
- Former President Trump's warnings about escalating trade tensions with China and the U.S. government shutdown pressured the cryptocurrency market.
- Bitcoin (BTC) fell below $122,000, closing the week around $115,000, while Ethereum (ETH) dropped 9% to $3,900.
- Despite market losses, institutional demand for Bitcoin remains strong, with BTC spot ETFs recording net inflows of $2.72 billion.
- The Federal Reserve downplayed the impact of tariffs on inflation, but the release of key economic data will be delayed due to the government shutdown.
Warnings from former President Trump about escalating trade tensions with China, coupled with the U.S. government’s partial shutdown, pressured the crypto sector, despite institutional support remaining strong, with BTC ETFs seeing net inflows of $2.72 billion.
The cryptocurrency market closed the week with widespread losses. Bitcoin (BTC) fell significantly, breaking below the $122,000 level, and is currently trading around $114,000. Meanwhile, Ethereum (ETH) plunged 10% to $3,840.
Other altcoins followed a similar trajectory. Binance Coin (BNB) lost more than 3%, XRP fell close to 11% for the week, and Solana (SOL) declined 7%. Dogecoin (DOGE) and Cardano (ADA) experienced smaller losses.
Institutional Demand Holds the Floor
Institutional demand remains a key driver for Bitcoin. Data from the week show that BTC spot ETFs recorded net inflows of $2.72 billion through Thursday, marking the second consecutive week of positive flows.
In parallel, several public companies advanced their adoption of Bitcoin as a treasury asset.
- DDC Enterprise Limited completed a $124 million funding round aimed at strengthening its BTC accumulation strategy.
- KindlyMD, Inc, through its subsidiary Nakamoto Holdings, announced a $250 million convertible debt plan to expand its Bitcoin portfolio.
These corporate moves not only reinforce institutional demand but also highlight Bitcoin’s growing legitimacy as a store of value and strategic corporate asset.
Trump and China Trigger Market Alerts
However, major cryptocurrencies reversed earlier gains after Trump warned of a potential escalation in trade tensions with China and the reintroduction of higher tariffs. In response, Beijing issued notices to various countries announcing export controls on rare earths and other key materials.
At the same time, the White House initiated mass federal employee layoffs amid the partial government shutdown. Budget Director Russ Vought confirmed that staff reductions have officially begun.
Fed Downplays Tariff Impact
Christopher Waller of the Federal Reserve emphasized that inflationary pressures from tariffs are expected to be temporary, stressing the importance of upcoming Consumer Price Index (CPI) data in guiding future monetary policy.
However, the Bureau of Labor Statistics (BLS) announced that the CPI report will be delayed until October 24, while other macroeconomic indicators will remain suspended until the government reopens.
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