Bitcoin Slumps as China Retaliates, Google Probe Unnerves Markets

Bitcoin's price took a 2.5% dive on February 3, 2025, as China's retaliatory tariffs on the U.S. and its probe into Google's activities sent shockwaves through the cryptocurrency market. The recent geopolitical developments have highlighted Bitcoin's sensitivity to macroeconomic developments and raised questions about its safe-haven status.



The announcement of new tariffs by China on specific U.S. goods led to a significant drop in Bitcoin's price, with the cryptocurrency falling to an over three-week low of $91,530 on February 3, 2025. This downturn was driven by escalating investor concerns over a potential global trade war following Trump's tariffs, as stated by Ryan Lee, chief analyst at Bitget Research. The analyst noted that while Bitcoin has historically been viewed as a hedge against traditional market volatility, its recent performance highlights its growing sensitivity to global economic events.



In addition to retaliatory tariffs, China's probe into Google's activities has further heightened investor anxiety, prompting a shift away from riskier assets, including cryptocurrencies. This geopolitical tension has led to a correction in Bitcoin's price, with the cryptocurrency's movement remaining in line with previous analysts' predictions of a "local top" above $110,000 in January, before a deeper retracement.

The recent sell-off reflects a typical risk-off reaction to macroeconomic shocks, but Bitcoin's safe-haven reputation still leaves room for a rebound if digital assets increasingly serve as hedges against inflation and currency devaluation. However, the extent to which Bitcoin can maintain its safe haven status will depend on how these geopolitical events unfold and their impact on global markets.



As investors and analysts continue to monitor the situation, they should remain vigilant to ongoing tariff-related news and other macroeconomic factors that may impact Bitcoin's price. While Bitcoin has been viewed as a hedge against volatility in traditional finance markets, its recent performance suggests that it may not always act as a reliable safe haven.

In conclusion, China's retaliatory tariffs on the U.S. and probe into Google's activities have significantly influenced Bitcoin's price movement, leading to increased market volatility and uncertainty. As these geopolitical events continue to unfold, investors should expect ongoing impacts on the cryptocurrency market, with potential implications for Bitcoin's safe haven status and regulatory uncertainty.