China Sanctions U.S. Defense Firms as Bitcoin Slides Amid Renewed Tensions

U.S.-China tensions are once again rattling global markets after China announced new sanctions against American defense companies, a move that has coincided with a fresh decline in Bitcoin prices. The development underscores how geopolitical risks and trade relations continue to influence both traditional assets and the cryptocurrency market.

According to a Bloomberg report, China revealed sanctions targeting 20 U.S. defense-related companies and 10 senior executives, signaling strong opposition to recent U.S. arms sales to Taiwan. Among the firms named are Boeing, Northrop Grumman, L3Harris Maritime Services, and Vantor. China’s Foreign Ministry stated that the sanctioned companies will face asset freezes within the country and will be prohibited from conducting business with Chinese entities. These measures highlight Beijing’s increasingly firm stance on what it considers violations of its core interests.

The announcement had an immediate impact on Bitcoin. Data from TradingView shows that BTC fell to around $87,000, down from an intraday high near $89,000, as investors reacted to the renewed geopolitical uncertainty. Market participants often view Bitcoin as a risk-sensitive asset during periods of escalating global tensions, despite its long-term narrative as a hedge against macro instability.

China criticized the U.S. arms sales to Taiwan as “large-scale,” following confirmation from the U.S. State Department that the Trump administration approved a package worth up to $11 billion. A spokesperson from China’s Foreign Ministry warned that any individual or enterprise involved in arms sales to Taiwan would “pay the price,” reinforcing the seriousness of the sanctions.

U.S.-China relations have been a key market driver throughout the year. Earlier trade disputes, including reciprocal tariffs imposed in April, weighed heavily on Bitcoin and the broader crypto market. Notably, Trump’s threat of a 150% tariff in October was among the catalysts for the sharp October 10 crypto market crash. Although tensions eased after a one-year trade truce was reached, the latest sanctions have reignited concerns.

Adding to investor anxiety, Bitcoin has struggled to rally even as equities and safe-haven assets like gold hit new highs. This divergence is fueling speculation that Bitcoin and the wider crypto market may already be entering a bearish phase, with prices potentially facing further downside pressure if geopolitical risks continue to escalate.