The threat from U.S. President Donald Trump to impose an additional 100% tariff on Chinese imports triggered a massive sell-off in the cryptocurrency market on Friday evening, resulting in historic losses and revealing the fragility of credit positions in the sector.
According to data from the financial analysis platform “CoinGlass,” the value of liquidations in the digital currency market reached approximately $18.28 billion by 3:47 PM Eastern Time, with Bitcoin, Ethereum, and Solana being the most affected cryptocurrencies.
These losses occurred amid a broad sell-off in U.S. financial markets, where the Nasdaq and S&P 500 indexes recorded their largest declines in six months, reflecting market concerns about the new trade escalation between Washington and Beijing.
Unprecedented Losses in the Digital Market
In just 24 hours, the market saw nearly $5 billion liquidated from Bitcoin positions, around $4 billion from Ethereum, and $2 billion from Solana, according to CoinGlass data, which described the event as “the largest liquidation event in cryptocurrency history.”
Bitcoin lost about 10% of its value over five days, trading at around $111,616 after briefly dropping to $103,000 during the panic on Friday evening. Ethereum decreased from $4,365 to $3,742, a decline of approximately 14.2%, while Solana plummeted from $223 to $178, marking a drop of nearly 20%.
Shift in Trump’s Policies Towards Digital Currencies
This shake-up comes after months of significant gains for cryptocurrencies since Trump took office this year, during which he radically changed his stance after previously criticizing them as “not based on anything real.”
In recent months, Trump has sought to engage the cryptocurrency investor community, participating in their conferences and launching his own digital currency. He also promised to create a strategic reserve of digital currencies to protect American innovation in this field.
In a notable move, Trump recently issued an executive order allowing the inclusion of digital assets such as cryptocurrencies in retirement plans (401k), contributing to Bitcoin’s rise to a record high of $124,000 last week before losing a significant portion of its gains following the tariff threats.
Renewed Trade Tensions Between Washington and Beijing
Trump’s new threats come at a time when the United States and China are attempting to ease their trade disputes; however, tensions resurfaced after Beijing imposed additional restrictions on rare earth metal exports, which are essential materials in technology and advanced energy industries.
Analysts believe that the escalation between the two economic powers could increase volatility in global markets, especially in high-risk assets like cryptocurrencies, which are quickly affected by geopolitical news and U.S. economic policies.
