Key Points
- A new tariff threat from President Trump caused a massive sell-off in the crypto market.
- The crash triggered over $18 billion in liquidations, the largest in crypto history.
- Bitcoin, Ethereum, and Solana all saw massive declines and billions in liquidations.
- The sell-off was part of a broader market panic, with U.S. stocks also falling sharply.
A new threat from President Donald Trump to slap an additional 100% tariff on Chinese imports sent the cryptocurrency market into a nosedive late Friday. The sudden sell-off triggered a massive wave of liquidations, exposing the risky leverage that has been building up in the space.
In what one data platform called the “largest liquidation event in crypto history,” over $18 billion worth of leveraged positions were wiped out. Bitcoin, Ethereum, and Solana were among the hardest-hit, with billions of dollars in liquidations for each.
The crypto crash was part of a broader market panic, as the Nasdaq and S&P 500 also saw their biggest one-day drops in six months.
Bitcoin plunged nearly 10% in the last five days, at one point dropping to $103,000 on Friday before recovering slightly. Ethereum saw a 14% decline, while Solana plummeted by nearly 20%.
The sudden downturn is a harsh reality check for a market that has been on a tear since Trump returned to office. The president’s recent pro-crypto moves, including an executive order to allow crypto in 401(k) plans, had sent Bitcoin soaring to a record high of over $124,000 just last week.
But the renewed trade tensions with China, which escalated on Thursday after Beijing tightened its export controls on rare earth minerals, have now brought the rally to a screeching halt, reminding investors just how quickly the mood can change.
