Bitcoin Rises Above $114,000, Ethereum Surges 6% as US-China Tensions Ease

Perhaps the biggest crypto liquidation event was a big misunderstanding.

Bitcoin’s price rose on Sunday afternoon, as its value rose by several thousand dollars to well above $114,000. Ethereum and most altcoins followed suit, with impressive gains in the past hour.

This came after reports that Friday’s threats by US President Donald Trump may have been exaggerated and that tensions between Washington and Beijing are de-escalating.

Investors wake up to important news from China:

The entire tariff crash on October 10 may have been one big misunderstanding between Trump and Xi.

News of China’s rare earth export controls broke on October 9 at approximately 8:30 a.m. ET, 26 hours BEFORE Trump…

— The Kobeissi Letter (@KobeissiLetter) October 12, 2025

The Kobeissi letter suggested the US may have misinterpreted news of China’s export controls on rare earths. Following Trump’s tariff announcement on Friday, Beijing said the new checks would not amount to a complete export ban and that applications that “comply with regulations” would be approved.

“While the market slumped on Friday, we believed that Trump’s 100% tariff announcement was a bargaining chip. Following China’s statement last night, we believe that the likelihood of Trump’s 100% tariff on China coming into effect is extremely low,” the analysts said.

For example, they concluded that the largest liquidation event in the cryptocurrency industry, which lost more than $19 billion in less than a day, “appears to have been caused by one big misunderstanding.”

US Vice President JD Vance continued the de-escalation on Sunday, saying their side appreciated the “friendship between Trump and Xi,” adding that the POTUS hopes the US “doesn’t have to use ‘leverage’ on China.” Vance noted that Trump is “willing to be a reasonable negotiator with China,” which appears to be the catalyst behind Sunday’s jump in the crypto markets.

BTC was below $112,000 earlier today before the news broke, but shot up more than $2,000 to hit $114,500 before falling back slightly. The asset is now up over ten thousand dollars from the recent low on Saturday morning.

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The altcoins followed suit, led by ETH’s impressive rise to almost $4,100. BNB is up more than 12% daily and is trading near $1,300. Other big winners include MNT (25%), TAO (18%), ASTER (16%) and PENGU (10%).