The bitcoin market had its biggest one-day crash in history on Friday after U.S. President Donald Trump announced 100% tariffs on all Chinese imports.
The sudden escalation in trade tensions wiped out over $5.3 billion in leveraged positions in the bitcoin market, and over $19 billion in the broader digital assets market.
The sell-off started early Friday after Trump posted on his Truth Social that he would introduce “massive new trade tariffs” and export controls on software in response to China’s restrictions on rare earth minerals.
Markets around the world went spiraling down — stocks, commodities and digital assets plummeted in hours.
According to CoinGlass, the volatility triggered the largest liquidation event in digital assets history.
“In the past 24 hours, 1,618,240 traders were liquidated, with a total liquidation amount of $19.13 billion,” CoinGlass wrote on X, adding that the real number “is likely much higher” due to reporting limits on exchanges like Binance.
Just days ago, bitcoin was at all-time highs above $125,000. But when Trump’s tariff announcement hit, the prices tanked.
Bitcoin dipped as low as $109,000 on Friday afternoon on Bitstamp, with some exchanges reporting prices as low as $106,000 before stabilizing around $112,000 by evening — down 8% on the day.
Smaller altcoins were hit even harder. Some tokens lost 50% in an hour, others 60% in a flash. “Probably one of the most severe flushes I’ve ever seen on alts, I didn’t even imagine alts had this much leverage in them,” longtime trader Cobie wrote on X. “(It) reminds me a little of summer 2021.”
Overall, the total digital assets market cap shrank by $560 billion in one day from $4.3 trillion to $3.74 trillion according to CoinGecko. Trading volume was over $500 billion as automated systems liquidated positions and forced traders out of their bets.
Analysts say too much leverage made the crash worse than it could have been. CoinGlass estimated $16.7 billion of the $19 billion in liquidations were longs, meaning traders who were betting on prices to go up were forced to sell as the market fell.
While millions of traders got rekt, at least one whale reportedly made a killing.
On-chain data showed this individual opened big short positions on bitcoin and ethereum just before Trump’s announcement, and made $190 million as prices crashed. The timing has everyone wondering if they had inside information.
Friday’s crash wasn’t limited to digital assets. Stocks and oil fell hard as investors ran to safe havens like gold and U.S. Treasuries.
Analysts said this highlights the connection between digital assets and the global economy. “This highlights crypto’s macro ties,” said Vincent Liu, CIO at Kronos Research. “Expect volatility, but watch for rebound signals in cleared markets.”
The tariff threat is a new phase in the U.S.-China trade war, nearly 10 months into Trump’s second term. His post on Truth Social said the tariffs were in response to China’s restrictions on rare earth materials used in advanced technology.
The move directly targets the global AI and semiconductor industries and has everyone worried about an extended economic conflict.
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