The main pressure on the sector stems from escalating U.S.–China tensions, which raise the probability of a global slowdown. Last week, Chinese authorities introduced higher port fees for U.S. merchant vessels and tightened controls on rare earths. As a result, foreign companies must obtain a state license to export goods that contain more than 0.1% of these minerals if they were mined in China using domestic production, refining, and processing technologies. Such measures could significantly harm tech giants by hindering new product development and complicating research in artificial intelligence (AI). In response, the White House announced additional 100.0% tariffs on Chinese imports starting November 1, if an upcoming in-person meeting between U.S. President Donald Trump and China’s President Xi Jinping fails to deliver a compromise. Analysts note that sanctions policy will also negatively affect mining activity, as current duties on equipment relevant to the industry run at 57.6%, while components shipped from Indonesia, Malaysia, and Thailand are taxed at 21.6%. The escalation has driven traders out of digital tokens and into traditional safe havens—chiefly gold—and pushed the Fear & Greed Index into “extreme fear” at 22. As a result, even typically steady institutional investors began redeeming ETF shares. The largest weekly outflow came on Thursday: according to CoinDesk, the biggest withdrawals hit BlackRock’s iShares Bitcoin Trust (−$29.0 million) and Fidelity’s FBTC (−$132.0 million).
Sentiment is also being pressured by uncertainty around the Federal Reserve’s next steps. Judging by recent remarks, several policymakers lean toward easing to support a cooling labor market; however, most emphasize that rate decisions depend on incoming data, and inflation could re-accelerate if sanctions on Chinese supplies intensify. It is possible that October’s rate cut will be the last this year—an outcome that could disappoint traders.
Elsewhere, activity around crypto exchange-traded products picked up. The U.S. Securities and Exchange Commission (SEC) recently accepted five new filings, including VanEck’s S-1 for the VanEck Lido Staked Ethereum ETF, which tracks the Lido staking token. The odds of approval remain unclear amid the government shutdown. Recall that the SEC has received at least 16 applications for various crypto ETFs, some of which are already past their initial review deadlines.
Overall, conditions remain challenging across digital assets, with geopolitical and monetary factors weighing on prices. Next week, most cryptocurrencies may continue to drift lower or slip into consolidation.