Key Points
- The cryptocurrency market experienced intense volatility following President Trump’s announcement of new tariffs.
- Bitcoin and Ethereum prices dropped significantly, and over $490 million in leveraged positions were liquidated.
U.S. President Donald Trump’s recent announcement of new tariffs sent shockwaves through the cryptocurrency market.
The tariffs, which included a minimum 10% duty on all imports and higher rates for key partners, caused both traditional and digital markets to react swiftly. Bitcoin descended from $88,500 to $83,500, and Ethereum fell from $1,934 to under $1,800.
Global Macroeconomic Shocks and Crypto
The total crypto market cap slipped by 2%, settling near $2.68 trillion. This sharp reaction emphasizes the sensitivity of the crypto market to global macroeconomic shocks. The new tariffs didn’t just disrupt global trade, they also directly impacted digital assets.
Over $490 million in leveraged positions were liquidated following the price plunge, affecting more than 160,000 traders. The most significant single liquidation occurred on Binance, where an ETH/USDT position worth $12 million was closed.
Market Sentiment and Crypto Losses
The market initially experienced a wave of optimism. However, as traders fully comprehended the impact of the tariffs, this confidence quickly faded. The Crypto Fear & Greed Index fell to 24, indicating heightened fear across the market.
The S&P 500 futures lost $2 trillion in market capitalization within just 15 minutes of the announcement. Major tech stocks, including Apple, Amazon, and Nvidia, also experienced significant losses. This broad sell-off extended to the cryptocurrency markets, with the panic in traditional finance amplifying the crypto crash.
In conclusion, the crypto market crash was directly caused by U.S. trade tariff announcements. These announcements sparked fear, triggered mass liquidations, and coincided with a global equity sell-off. Therefore, clear geopolitical policy, not rumors, was the root cause of the crash.
