The recent plunge in cryptocurrency prices has sent shockwaves throughout the market, with Bitcoin, Ethereum, and Dogecoin all experiencing significant losses. This downturn is largely attributed to geopolitical tensions following recent announcements by former U.S. President Donald Trump, which have raised concerns over a potential trade war with China.
CoinMarketCap data indicates that Bitcoin has fallen sharply, reaching lows of $104,000 in the last 24 hours. This decline has erased all gains it achieved in early October, where it previously peaked at an all-time high of over $126,000. Ethereum has not fared much better, dropping to around $3,400, while Dogecoin has slipped below the crucial $0.2 threshold, hitting a low of $0.11.
The catalyst for this turmoil was a post on Trump’s Truth Social account, where he declared that the U.S. would impose a staggering 100% tariff on Chinese imports, effective November 1. In addition to tariffs, the U.S. will implement export controls on critical software from China. Earlier in the day, Trump threatened to significantly ramp up tariffs, claiming that relations with China had become increasingly hostile. This announcement was enough to send Bitcoin tumbling from approximately $116,000, exacerbating the declines across the crypto spectrum.
The fallout from these tariff announcements has manifested in a massive liquidation event across the cryptocurrency market. According to data from CoinGlass, around $20 billion has been wiped out in just 24 hours, marking this incident as the largest liquidation event in crypto history, surpassing previous crashes linked to the COVID-19 pandemic and the FTX bankruptcy.
Experts in the crypto space have offered insights into potential complicating factors. Arthur Hayes, co-founder of BitMEX, suggested that major centralized exchanges may have played a role in the market downturn. He emphasized that automatic liquidations tied to cross-margin positions on large exchanges led to many altcoins experiencing severe losses. Hayes noted, however, that investors who bought the dip may find themselves with valuable assets, as the market might not reach those low levels again anytime soon.
Crypto analyst Kevin Capital echoed these sentiments, highlighting that significant issues with top exchanges such as Robinhood, Coinbase, and Binance contributed to the market instability. He pointed out the frustration among investors who were unable to purchase assets at the lowest prices due to operational issues on these platforms.
As the dust settles, the cryptocurrency market is left to grapple with the implications of Trump’s trade policies while investors remain wary amid mounting negative sentiment and extreme volatility.
