The global markets experienced significant volatility following U.S. President Donald Trump’s threat to impose a 100% tariff on Chinese imports. The announcement, made via Truth Social, triggered a sharp drop in investor risk appetite, leading to massive sell-offs across cryptocurrency markets during the Asian trading session. Data from CoinGlass revealed that $19.1 billion in leveraged positions were liquidated within just 24 hours, with $16.7 billion coming from long positions.
Bitcoin briefly plunged to $102,000 before rebounding to $113,294, while Ether climbed to $3,844. However, the CoinDesk 20 Index fell 12.1%, and the total cryptocurrency market capitalization dropped to $3.87 trillion. The sell-off represented a tenfold increase in liquidation volume compared to the FTX collapse in 2022 and the pandemic-induced selloffs.
Concerns over a renewed trade war, combined with the ongoing U.S. government shutdown, deepened market anxiety. The absence of key economic data releases during the shutdown made it difficult for investors to assess conditions accurately. Despite the turbulence, Ethena reported that issuance and redemption of its USDe stablecoin remained stable, with collateral ratios supported by profits from short positions. Meanwhile, delayed liquidation reports from major exchanges such as Binance fueled speculation that total losses might be even higher than official figures suggest, adding to the panic and triggering a chain reaction of selloffs.
Trump’s trade comments also reverberated across Asian and European equity markets. Hong Kong’s Hang Seng Index fell 3%, Japan’s Nikkei 225 declined 2.8%, and Nasdaq futures traded lower, signaling a global shift toward risk aversion.
Crypto analysts, however, caution against interpreting the downturn as the start of a long-term bearish trend. Some note that the crypto market has historically rebounded quickly after politically driven selloffs, suggesting the current correction could represent a short-term cooling phase.
Ultimately, Trump’s statements underscored once again how sensitive digital asset markets are to geopolitical risk. Yet, the ongoing participation of institutional investors and the stability of the stablecoin market indicate that the crypto ecosystem remains resilient and continues to mature despite global uncertainty.