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- A threat by U.S. President Donald Trump to impose a 100% tariff on Chinese goods triggered a crypto market crash, resulting in $9.55 billion in liquidations.
- The event impacted over 1.5 million traders, with Bitcoin and Ethereum alone accounting for over $2.6 billion of the total liquidations.
- The vast majority of the losses, approximately $8 billion, came from traders holding 'long' positions who were betting on prices to increase.
- Trump's tariff threat was a direct retaliation against a new Chinese policy that restricted the export of goods containing rare earth minerals.
The cryptocurrency market was thrown into chaos over the last 24 hours, experiencing a crash that saw over $9.55 billion worth of investor positions liquidated, according to data from CoinGlass.
The massive forced sell-off affected more than 1.5 million cryptocurrency traders as digital asset prices plummeted sharply.
The turmoil was directly linked to US President Donald Trump’s threat to impose a 100 per cent import tariff on Chinese goods, signalling the immediate start of a renewed trade war.
The total crypto market capitalisation dropped by more than 9 per cent on Friday to $3.8 trillion.
'Biggest Liquidation in History'
The majority of the losses, approximately $8 billion, came from traders holding 'long' positions (betting on rising prices), with a further $1.55 billion lost by those holding 'short' positions (betting on falling prices).
The two largest cryptocurrencies bore the brunt: Bitcoin saw $1.37 billion in liquidations, while Ethereum recorded $1.26 billion.
The single largest liquidation event recorded was a staggering $87.53 million on a BTC/USDT pair executed on the HTX platform.
The scale of the carnage prompted at least one market analyst to suggest Friday’s event could represent the “biggest liquidation event in crypto history” in terms of US dollar value.
Bitcoin, the market leader, plunged from a price above $122,000 early Friday to roughly $113,600, erasing all gains made since August.
At one point during the 24-hour frenzy late Friday evening, the cryptocurrency briefly dropped below $102,000.
Geopolitical Spark
The sharp drop across nearly the entire cryptocurrency sector followed President Trump’s warning of a 100 per cent tariff on all Chinese imports.
The threat was reported to be in retaliation for a policy change by Beijing on Thursday, where the Chinese Ministry of Commerce mandated that foreign entities require a license to export goods containing more than 0.1 per cent of rare earth minerals from China.
The President confirmed the 100 per cent tariff imposition on Friday afternoon US time, alongside reports that he had cancelled a planned meeting with Chinese President Xi Jinping.
However, Trump later softened his stance, stating he remained open to a meeting with President Xi and might withdraw the tariff increase if China reverses its new policy before 1 November.
