On Friday, the cryptocurrency market experienced a significant downturn, exacerbated by U.S. President Trump’s announcement of a 100% tariff on Chinese goods. This bold move triggered a swift market reaction, leading to a sharp decline in crypto prices.
Bitcoin, which was already under pressure, saw a dramatic fall from its trading value of around $117,000. Following Trump’s comments, the leading digital currency plummeted below $110,000, marking a 12% drop within a mere 24-hour window. Ether also faced substantial losses, tumbling 16% to trade below $3,700. Other major altcoins were not spared; XRP fell by approximately 20%, while Solana and Dogecoin suffered losses ranging from 20% to 30%. Additionally, cryptocurrencies like Cardano, Chainlink, and Aave experienced declines as severe as 40%.
The chaotic trading environment resulted in over $7 billion worth of liquidations for traders who had positioned themselves for rising prices, according to data from CoinGlass. The downturn was triggered by escalating trade tensions between the U.S. and China, exacerbated by Trump’s statements regarding new tariffs in response to China’s export controls on rare earth metals. In a post on Truth Social later in the day, the former president emphasized that the new tariffs would take effect starting November 1, further igniting market fears.
The fallout from Trump’s announcement was immediate and severe, with Bitcoin dropping by $3,000 as soon as the post went live. Analysts noted that the volatility reminded them of the drastic market crash observed during the initial COVID-19 lockdowns in March 2020. “Covid level nukes,” remarked prominent trader Bob Loukas, highlighting the magnitude of the crash. “Wow, nasty, nasty action. But also a great candidate for the mother of shakeouts,” he added.
Investment firm Lumida Wealth’s founder, Ram Ahluwalia, described the day as “brutal,” attributing the rapid decline to a combination of the unexpected news and an overheated market. Another notable trader, known as Pentoshi, acknowledged the emotional toll the market was taking, stating that many were experiencing significant pain as a result of the downturn. “This flush is in the top 3 all time,” he observed, underscoring the sentiment shared by many participants in the market.
Zaheer Ebtikar, founder and CIO of crypto hedge fund Split Capital, explained the devastating impact on the altcoin sector, indicating that the market was at levels not observed in over a year. “Full leverage reset and market dislocation,” he emphasized, summarizing the conditions many traders faced.
The combination of geopolitical tensions and market vulnerabilities painted a stark picture for the cryptocurrency landscape, suggesting a challenging road ahead in the near term.
