Bitcoin surpasses $114,000 and Ethereum climbs 6% as US-China tensions ease

Crypto’s biggest liquidation event might just be one big misunderstanding.

The price of Bitcoin woke up on Sunday afternoon, as the asset surged several thousand dollars to reach well over $114,000. Ethereum and most altcoins followed suit, with impressive gains over the past hour.

It follows reports that threats made by US President Donald Trump on Friday may have been exaggerated and tension between Washington and Beijing is easing.

Investors wake up to major news from China:

The October 10 tariff collapse may have been a simple misunderstanding between Trump and Xi.

The news regarding Chinese rare earth export controls broke on October 9 at approximately 8:30 a.m. ET, 26 hours BEFORE Trump…

– Kobeissi Letter (@KobeissiLetter) October 12, 2025

Kobeissi’s letter suggests that the United States may have misinterpreted information regarding Chinese controls on rare earth exports. After Trump’s announcement of the tariffs on Friday, Beijing said the new controls did not amount to a total ban on exports and that requests “in compliance with regulations” would be approved.

“Amid the market slowdown on Friday, we assessed Trump’s 100% tariff announcement as a bargaining chip. After China’s statement last night, we believe the chances of Trump’s 100% tariffs on China going into effect are extremely low,” the analysts said.

Thus, they concluded that the largest liquidation event in the cryptocurrency sector, which saw more than $19 billion destroyed in less than a day, “appears to have been driven by a big misunderstanding.”

US Vice President JD Vance continued the de-escalation on Sunday, saying his camp valued the “friendship between Trump and Xi” and added that the POTUS hoped the US “would not need to use ‘influence’ on China.” Vance noted that Trump is “willing to be a reasonable negotiator with China,” which appears to be the catalyst behind Sunday’s rise in crypto markets.

BTC was sitting below $112,000 earlier today, before the news was released, but climbed more than two thousand dollars to reach $114,500 before pulling back slightly. The asset is now up more than ten thousand dollars since the recent low marked Saturday morning.

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