Massive $18 Billion Crypto Liquidation
According to data from analytics firm CoinGlass, the sharp downturn led to over $18.28 billion in total liquidations as of 3:47 p.m. ET. Major cryptocurrencies, including Bitcoin (BTC), Ether (ETH), and Solana (SOL), saw steep declines as traders rushed to exit positions.
CoinGlass described the event on X (formerly Twitter) as the “largest liquidation event in crypto history,” underscoring how heavily leveraged the market had become.
Bitcoin, the world’s largest cryptocurrency, dropped nearly 10% over five days, briefly falling to $103,000 late Friday before recovering slightly to $111,616.20 by 3:45 p.m. ET. Ether, the second-largest digital token by market value, tumbled 14.2%, sinking from $4,365.63 to $3,742.88.
Meanwhile, Solana recorded one of the steepest plunges, dropping almost 20% to $178.72 from $223.10.
The dramatic price movements erased billions in open positions. CoinGlass reported approximately $5 billion in Bitcoin liquidations, $4 billion in Ether, and nearly $2 billion in Solana, as forced selling cascaded through global exchanges.
Broader Market Turmoil
The chaos wasn’t confined to digital assets. Traditional financial markets also reeled as the Nasdaq and S&P 500 experienced their sharpest single-day declines in six months. Analysts said investors were reacting to fears that Trump’s proposed tariffs could reignite trade tensions between the U.S. and China, potentially slowing global economic growth.
“Traders rushed to safe assets as volatility spiked across both equities and crypto,” said Lena McCarthy, a senior analyst at Horizon Markets. “The leverage that’s built up in the crypto ecosystem made it especially vulnerable to this kind of shock.”
Trump’s Tariff Threat Reignites U.S.–China Tensions
The sudden market drop followed Trump’s warning on Thursday that he would double tariffs on Chinese goods to 100% if Beijing continued what he called “economic manipulation and export aggression.”
The statement came just days after China announced new export restrictions on rare earth minerals — critical materials used in electronics, semiconductors, and renewable energy technologies. The move has been seen as part of Beijing’s strategy to counter Washington’s tightening tech export controls.
Trump’s remarks sent ripples across global markets, with investors fearing a repeat of the 2018–2019 trade war that disrupted supply chains and rattled businesses worldwide.
“Markets are pricing in renewed U.S.–China tension, which has historically been bad for risk assets and great for volatility,” said Ben Carter, chief economist at Nova Capital.
Crypto’s Rise Under Trump
Ironically, the sell-off came after a year of strong crypto performance under Trump’s leadership. Since taking office, the president has shifted from a vocal critic of Bitcoin — once calling it “based on thin air” — to one of its most prominent advocates.
In recent months, Trump has addressed crypto conventions, launched his own meme coin, and even proposed a U.S. strategic crypto reserve aimed at reducing reliance on traditional fiat currencies.
Earlier this month, Trump signed an executive order allowing digital assets such as Bitcoin and Ether to be included in 401(k) retirement plans — a move hailed by crypto supporters as a major step toward mainstream adoption. That announcement sent Bitcoin surging to an all-time high of $124,000 just last week.
Volatility Returns to Digital Markets
Analysts say the latest downturn serves as a reminder of the crypto market’s fragility, especially when large portions of the market are built on high leverage and speculative trading.
“The Trump tariff shock was the pin that popped an overinflated bubble,” explained Jamie Lowe, a market strategist at CryptoQuant. “We’ve seen excessive leverage in perpetual futures and spot margin markets, and once the liquidation cascade began, it fed on itself.”
Despite the steep losses, Lowe said the correction could ultimately strengthen the market by flushing out speculative excess. “This is painful in the short term, but healthy for long-term stability,” he added.
China’s Rare Earth Restrictions Add Pressure
The renewed trade tension stems largely from China’s decision to tighten exports of rare earth minerals, materials crucial for advanced manufacturing and defense industries. Beijing’s restrictions came as retaliation for Washington’s semiconductor export bans, which have prevented Chinese firms from accessing critical U.S. technology.
These rare earth materials are vital components for smartphones, electric vehicles, and renewable energy systems. The restrictions have already begun to squeeze supply chains, pushing up costs for manufacturers worldwide.
“China’s move is a clear warning that it’s willing to weaponize its control of rare earths,” said Dr. Helen Zhao, a trade policy expert at the University of Hong Kong. “Trump’s tariff threat only escalates the confrontation.”
Looking Ahead
While Washington and Beijing continue trade talks, investors remain on edge. Trump’s latest comments have cast doubt on the progress of negotiations, and analysts warn that an extended standoff could send both financial and crypto markets into deeper turmoil.
Still, some industry observers believe the long-term outlook for digital assets remains positive. “Institutional adoption, regulatory clarity, and government-backed crypto initiatives could cushion volatility once the dust settles,” said Mark Jensen, a digital finance researcher.
As markets await the next move from both Washington and Beijing, the crypto world faces a sobering reality: even in an era of growing mainstream acceptance, global politics can still move prices faster than any algorithm.